BANCROFT 
LIBRARY 

♦ 

THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 


BANK  ACT 

OF  THE 

STATE  OF  CALIFORNIA 

AS  AMENDED 

1915 

Chapter 

76 

Statutes  of  1909: 

Approved  March  1.     In  effect  July  1, 

Amended  by   Statutes   of   1911: 

1909. 

Chapter 
Chapter 
Chapter 
Chapter 

11 
488 
494 
495 

Approved  Feb.     6.    In   effect  Feb.     6, 
Approved  Apr.  21.    In  effect  June  20, 
Approved  Apr.   21.    In  effect  June  20, 
Approved  Apr.   21.    In  effect  June   20, 

1911. 
1911. 
1911. 
1911. 

Amended  by  Statutes  of  1911   (Special  Session] 

: 

Chapter 
Chapter 

2, 
24, 

Approved  Dec.   18.     In   effect  Feb.   16, 
Approved  Dec.   24.     In  effect  Feb.   22, 

Amended  by  Statutes  of  1913: 

1912. 
1912. 

Chapter  104, 
Chapter  192, 

Approved  May     6.     In  effect  Aug.  10, 
Approved  May  31.     In  effect  Aug.  10, 

1913. 
1913. 

Amended  by  Statutes  of  1915: 

Chapter  140, 
Chapter  608, 
Chapter  611, 
Chapter  612, 

1 

Approved  April  28.     In  effect  Aug.   7, 
Approved  June      3.     In  effect  Aug.  7, 
Approved  June      3.     In  effect  Aug.  7, 
Approved  June      3.     In  effect  Aug.  7, 

1915. 
1915. 
1915. 
1915. 

SvTTH  COMPLETE  INDEX 

REVISED  EDITION  ISSUED  BY 

m\t  <Attgl 

c*  8c  J&tmbxm  Parts  |3&feitmtal  ^nxtk 

SAN  FRANCISCO,  CALIFORNIA 

JUNE,  1915 

1  ii!    BANC  U'lf'tlARY 


CALIFORNIA  BANK  ACT 


ARTICLE  I. 

GENERAL  PROVISIONS. 

Section  1.  This  act  shall  be  known  as  the  "bank  act,"  and 
shall  be  applicable  to  all  corporations  specified  in  the  next  sec- 
tion and  to  such  other  persons,  associations,  co-partnerships  or 
corporations  who  shall,  by  violating  any  of  its  provisions,  be- 
come subject  to  the  penalties  provided  therein. 

Sec.  2.  The  word  "bank"  as,used  in  this  act  shall  be  con- 
strued to  mean  any  incorporated  banking  institution  which 
shall  have  been  incorporated  to  conduct  the  business  of  receiv- 
ing money  on  deposit,  or  transacting  a  trust  business  as  herein 
defined.  The  soliciting,  receiving  or  accepting  of  money  or  its 
equivalent  on  deposit  as  a  regular  business  shall  be  deemed  to 
be  doing  a  commercial  or  savings  bank  business  whether  such 
deposit  is  made  subject  to  check  or  is  evidenced  by  a  certificate 
of  deposit,  a  pass  book,  a  note,  a  receipt  or  other  writing; 
provided,  that  nothing  herein  shall  apply  to  or  include  money 
or  its  equivalent  left  in  escrow  or  left  with  an  agent,  pending 
investment  in  real  estate  or  securities  for  or  on  account  of  his 
principal.  It  shall  be  unlawful  for  any  corporation,  partner- 
ship, firm  or  individual  to  engage  in  or  transact  a  banking  busi- 
ness within  this  state  except  by  means  of  a  corporation  duly  or- 
ganized for  such  purpose.  Banks  are  divided  into  the  following 
classes : 

(a)  Savings  banks ; 

(o)  Commercial  banks ;  and 

(c)  Trust  companies. 


4  CALIFORNIA   BANK   ACT 

Sec.  3.  Corporations  may  be  organized  by  any  number  of 
natural  persons,  not  less  in  any  case  than  three,  under  the  laws 
of  this  state  to  conduct,  as  provided  in  this  act,  and  not  other- 
wise, any  one  or  more  or  all  of  the  businesses  mentioned  in 
divisions  (a),  (h),  and  (c)  of  section  two,  of  this  act. 

Sec.  4.  The  term  "savings  bank,"  when  used  in  this  act, 
means  a  bank  organized  for  the  purpose  of  accumulating  and 
loaning  the  funds  of  its  members,  stockholders,  and  depositors, 
and  which  may  loan  and  invest  the  funds  thereof,  receive  de- 
posits of  money;  loan,  invest  and  collect  the  same  with  in- 
terest ;  and  may  repay  depositors  with  or  without  interest,  and 
having  power  to  invest  said  funds  in  such  property,  securities 
and  obligations  as  may  be  prescribed  by  this  act;  and  to  de- 
clare and  pay  dividends  on  its  general  deposits,  and  a  stipu- 
lated rate  of  interest  on  deposits  made  for  a  stated  period  or 
upon  special  terms. 

Sec.  5.  The  term  "commercial  bank,"  when  used  in  this  act, 
means  any  bank  authorized  by  law  to  receive  deposits  of 
money,  deal  in  commercial  paper  or  to  make  loans  thereon,  and 
to  lend  money  on  real  or  personal  property,  and  to  discount 
bills,  notes,  or  other  commercial  paper,  and  to  buy  and  sell 
securities,  gold  and  silver  bullion,  or  foreign  coins  or  bills  of 
exchange. 

Sec.  6.  The  term  ' '  trust  company, ' '  when  used  in  this  act, 
means  any  corporation  which  is  incorporated  under  the  laws  of 
this  state  for  the  purpose  of  conducting  the  business  of  acting 
as  executor,  administrator,  guardian  of  estates,  assignee,  re- 
ceiver, depositary  or  trustee  under  appointment  of  any  court 
or  by  authority  of  any  law  of  this  state,  or  as  trustee  for  any 
purpose  permitted  by  law. 

Sec.  7.  No  foreign  corporation  shall  transact  a  banking 
business  in  this  state  without  first  complying  with  all  the  re- 
quirements of  the  laws  of  this  state  relative  to  banks  as  denned 
in  this  act,  and  without  having  assigned  to  its  business  in  this 
state  the  amount  of  paid-up  capital  and  surplus  required  by 
this  act  for  the  transaction  of  such  business  within  this  state. 
No  foreign  banking  corporation  shall  transact  business  in  this 


CALIFORNIA   BANK   ACT  5 

state  until  such  corporation  has  made  the  assignment  of  capital 
required  by  this  section  and  has  received  a  certificate  from  the 
superintendent  of  banks.  Any  foreign  banking  corporation 
transacting  business  in  this  state  shall  become  subject  to  the 
supervision  of  the  state  superintendent  of  banks.  Every  for- 
eign banking  corporation,  including  those  which  were  on 
January  second,  nineteen  hundred  thirteen,  transacting  busi- 
ness in  this  state,  which  receives  any  deposits  or  transacts  any 
other  banking  business  or  transacts  its  business  in  such  a  man- 
ner as  might  lead  the  public  to  believe  that  its  business  is  that 
of  a  bank  shall  conduct  all  its  business  in  accordance  with  the 
statutes  governing  incorporated  banking  institutions  organized 
under  the  laws  of  this  state.  The  capital  of  any  such  foreign 
banking  corporation  assigned  to  its  business  in  this  state  and 
all  funds  and  deposits  of  money  received  by  any  such  corpora- 
tion in  this  state  or  for  or  in  connection  with  its  business  in 
this  state  and  all  accounts  and  transactions  of  said  business 
transacted  by  any  such  foreign  corporation  in  this  state  shall 
be  kept  separate  and  apart  from  the  general  business,  assets 
and  accounts  of  such  foreign  corporation  in  the  same  manner 
as  if  the  business  of  such  foreign  corporation  conducted  within 
this  state  was  that  of  a  separate  and  independent  corporation 
organized  under  the  laws  of  this  state  for  the  purpose  of  doing 
a  banking  business  and  all  of  the  provisions  of  this  act  affecting 
investments,  loans  of  money,  receiving  deposits  and  conducting 
business  in  any  respect  shall  be  deemed  to  apply  to  such  as- 
signed capital,  investments,  loans,  deposits,  assets,  funds  and 
business  in  the  same  manner  as  if  such  assigned  capital,  invest- 
ments, loans,  deposits,  assets,  funds  and  business  were  that  of 
such  separate  and  independent  corporation;  provided,  that 
loans  may  be  made  by  any  such  foreign  corporation  based  on 
its  entire  paid-up  capital  and  surplus  in  case  such  foreign  cor- 
poration shall  have  assigned  to  its  business  in  this  state  a 
paid-up  capital  and  surplus  as  above  provided  equal  to  20  per 
centum  of  the  deposit  liability  of  such  branch  agency  or  office 
to  residents  of  this  state.  Such  funds  and  investments  or  loans 
thereof  shall  be  appropriated  solely  to  the  security  and  pay- 
ment of  such  deposits,  and  shall  not  be  mingled  with  the  in- 
vestments of  the  capital  stock  or  other  money  or  property  be- 


D  CALIFORNIA   BANK   ACT 

longing  to  such  corporation  or  be  liable  for  the  debts  or  obli- 
gations thereof.   All  income  received  from  the  investment  of 
said  funds  over  and  above  such  funds  as  may  be  paid  to  de- 
positors as  interest  or  shall  be  carried  to  the  surplus  fund,  as 
provided  in  section  twenty-one  of  this  act,  shall  accrue  as 
profits  to  the  corporation  and  may  be  transferred  to  its  general 
funds.  No  such  foreign  corporation  shall  transact  any  banking 
business  in  this  state  until  it  has  executed  and  filed  with  the 
superintendent  of  banks  a  written  instrument  appointing  such 
superintendent  or  his  successor  in  office,  its  true  and  lawful 
attorney,  upon  whom  all  process  issued  by  authority  of  or  un- 
der any  law  of  this  state  may  be  served,  with  the  same  effect 
as  if  such  corporation  was  formed  under  the  laws  of  this  state 
and  had  been  lawfully  served  with  process  therein.  Such  serv- 
ice upon  such  attorney  shall  be  deemed  personal  service  on 
such  corporation.  The  superintendent  of  banks  shall  forthwith 
forward  by  mail,  postage  prepaid,  a  copy  of  every  process 
served  upon  him  under  the  provisions  of  this  section,  addressed 
to  the  manager  or  agent  of  such  corporation,  at  its  principal 
place  of  business  in  this  state.  For  each  copy  of  process,  the 
superintendent  of  banks  shall  collect  the  sum  of  two  dollars, 
which  shall  be  paid  by  the  plaintiff  or  moving  party  at  the  time 
of  the  service,  to  be  recovered  by  him  as  a  part  of  his  taxable 
costs  if  he  succeed  in  the  suit  or  proceeding.   No  foreign  cor- 
poration shall  have  or  exercise  in  this  state  the  power  to  receive 
deposits  of  trust  moneys,  securities  or  other  personal  property 
from  any  person  or  corporation  or  any  of  the  powers  specified 
in  section  six  of  this  act,  nor  have  or  maintain  an  office  in  this 
state  for  the  transaction  of,  or  transact,  directly  or  indirectly, 
any  such  or  similar  business,  except  that  a  trust  company  in- 
corporated in  another  state  may  be  appointed  and  may  accept 
appointment  and  may  act  in  this  state  as  executor  of  or  trustee 
under  the  last  will  and  testament  of  any  deceased  person,  upon 
giving  the  bond  required  in  such  cases  of  individuals  unless 
waived  by  the  last  will  and  testament  making  such  appoint- 
ment and  by  taking  and  subscribing  an  oath  for  faithful  per- 
formance of  such  trust  by  the  president,  vice-president,  secre- 
tary, manager  or  trust  officer  of  said  corporation;    provided, 
that  similar  corporations  organized  under  the  laws  of  this  state 


CALIFORNIA   BANK   ACT  7 

are  permitted  by  law  to  act  as  such  executor  or  trustee  in  the 
state  where  such  foreign  corporation  was  organized ;  and,  pro- 
vided, further,  that  such  superintendent  of  banks,  for  the  time 
being,  shall  be  the  attorney  of  such  foreign  corporation  quali- 
fying or  acting  in  this  state  as  such  executor  or  trustee,  upon 
whom  process  against  such  foreign  corporation  may  be  served 
in  any  action  or  legal  proceeding  against  such  executor  or 
trustee  affecting  or  relating  to  the  estate  or  property  repre- 
sented or  held  by  such  executor  or  trustee,  or  any  act  or  de- 
fault of  such  foreign  corporation  in  reference  to  such  estate  or 
property,  and  it  shall  be  the  duty  of  any  such  foreign  corpora- 
tion so  qualifying  or  acting  to  file  in  the  office  of  said  superin- 
tendent of  banks  a  copy  of  its  articles  of  incorporation,  or  of 
the  statute  chartering  such  corporation,  certified  by  its  secre- 
tary under  its  corporate  seal,  together  with  the  post  office  ad- 
dress of  its  home  office,  and  a  duly  executed  appointment 
of  said  superintendent  of  banks  as  its  attorney  to  accept  serv- 
ice of  process  as  above  provided,  and  said  superintendent  of 
banks,  when  any  such  process  is  served  upon  him,  shall  at  once 
mail  the  papers  so  served  to  the  home  office  of  such  corpora- 
tion ;  and  provided,  further,  that  no  foreign  corporation  hav- 
ing authority  to  act  as  executor  of  or  trustee  under  the  last  will 
and  testament  of  any  deceased  person  shall  establish  or  main- 
tain, directly  or  indirectly,  any  branch  office  or  agency  in  this 
state,  or  shall  in  any  way  solicit,  directly  or  indirectly,  any 
business  as  executor  or  trustee  therein,  and  that  for  any  viola- 
tion of  this  proviso,  the  court  having  jurisdiction  of  such  execu- 
tor or  trustee  in  said  proceeding  may  in  its  discretion,  revoke 
the  right  of  such  foreign  corporation  thereafter  to  act  as  execu- 
tor or  trustee  therein ;  provided,  that  nothing  in  this  act  shall 
limit  or  affect  the  right  of  any  foreign  corporation  doing  a 
banking  business  in  this  state,  to  lend  within  this  state,  moneys 
of  such  corporation  which  do  not  form  a  part  of  the  moneys, 
deposits  or  assets  .of  such  corporation  assigned  or  belonging  to 
its  business  in  this  state. 

Sec.  8.  Every  corporation,  at  the  time  it  applies  for  a  certifi- 
cate of  authority  to  do  a  banking  business,  must  file  with  the 
superintendent  of  banks  a  certified  copy  of  its  articles  of  in- 


8  CALIFORNIA   BANK   ACT 

corporation,  or  of  the  statute  chartering  such  corporation,  a 
certified  copy  of  its  by-laws,  and  also  a  certified  copy  of  all  in- 
struments amending  or  altering  such  articles  of  incorporation 
or  charter  or  by-laws.  Thereafter  a  certified  copy  of  each 
amendment  or  certificate  shall  likewise  be  so  filed  before  such 
instrument  takes  effect.  There  must  also  be  filed  in  the  office 
of  the  superintendent  of  banks  before  he  shall  issue  his  certifi- 
cate a  certified  copy  of  the  affidavit  required  by  section  two 
hundred  ninety  a  of  the  Civil  Code.  Each  certification  re- 
quired by  the  provisions  of  this  section  other  than  that  of  by- 
laws must  be  by  the  secretary  of  state. 

Sec.  9.  No  bank  in  this  state,  or  any  officer  or  director 
thereof,  shall  hereafter  open  or  keep  an  office  other  than  its 
principal  place  of  business,  without  first  having  obtained  the 
written  approval  of  the  superintendent  of  banks  to  the  opening 
of  such  branch  office,  which  written  approval  may  be  given  or 
withheld  in  his  discretion,  and  shall  not  be  given  by  him  until 
he  has  ascertained  to  his  satisfaction  that  the  public  conven- 
ience and  advantage  will  be  promoted  by  the  opening  of  such 
branch  office ;  provided,  that  no  bank  or  any  officer  or  director 
thereof,  shall  open  or  maintain  any  such  branch  office  unless 
the  capital  of  such  bank,  actually  paid  in,  in  cash,  shall  exceed 
the  amount  required  by  this  act  by  the  sum  of  twenty-five 
thousand  dollars  for  each  branch  office  opened  and  maintained. 
Every  bank,  before  it  opens  a  branch  office,  shall  obtain  the 
certificate  of  authority  of  the  superintendent  of  banks  for  the 
opening  of  each  of  said  branch  offices.  The  applicant  shall  pay 
for  such  certificate  a  fee  of  fifty  dollars;  provided,  however, 
that,  in  order  to  encourage  saving  among  the  children  of  the 
schools  of  this  state,  a  bank  may,  with  the  written  consent  of 
and  under  regulations  approved  by  the  superintendent  of 
banks  and,  in  the  case  of  public  schools,  by  the  board  of  educa- 
tion or  board  of  school  trustees  of  the  city  or  district  in  which 
the  school  is  situated,  arrange  for  the  collection  of  savings  from 
the  school  children  by  the  principal  or  teachers  of  such  schools 
or  by  collectors.  The  principal,  teacher  or  person  authorized 
by  the  bank  to  make  collections  from  the  school  children  shall 
be  deemed  to  be  the  agent  of  the  bank  and  the  bank  shall  be 


CALIFORNIA   BANK   ACT  9 

liable  to  the  pupil  for  all  deposits  made  with  such  principal, 
teacher  or  other  person,  the  same  as  if  the  deposits  were  made 
by  the  pupil  directly  with  the  bank.  Every  bank  and  every 
such  officer  or  director  violating  the  provisions  of  this  section 
shall  forfeit  to  the  people  of  the  state  the  sum  of  one  hundred 
dollars  for  every  day  during  which  any  branch  office  hereafter 
opened  shall  be  maintained  without  such  written  approval. 

Sec.  10.  No  person  shall  be  eligible  for  election  as  director 
of  a  bank  having  a  capital  stock  unless  he  is  a  stockholder  of 
the  bank,  owning,  in  his  own  right,  shares  thereof  of  the  par 
value  of  at  least  five  hundred  dollars ;  and  every  person  elected 
to  be  director  who,  after  such  election,  shall  cease  to  be  the 
owner  in  his  own  right  of  the  amount  of  such  stock  aforesaid, 
or  shall  hypothecate  or  in  any  way  pledge  such  stock  as  se- 
curity for  any  loan  or  debt  shall  immediately  notify  the  super- 
intendent of  banks  in  writing  of  such  sale  or  hypothecation 
and  such  director  may  be  removed  from  the  office  of  director 
by  the  superintendent  of  banks ;  provided,  however,  that  any 
executor  or  executrix,  administrator  of  administratrix  holding 
shares  of  a  bank  of  the  par  value  of  five  hundred  dollars,  in 
his  or  her  representative  capacity  shall  be  eligible  for  election 
as  a  director  thereof.  If  a  bank  be  organized  without  capital 
stock,  no  person  shall  be  eligible  as  a  director  thereof  unless  he 
is  both  a  member  and  a  depositor  of  such  bank. 

Sec.  11.  The  board  of  directors  of  a  bank  organized  under 
the  laws  of  this  state  must  hold  a  meeting  in  its  banking 
premises  at  least  once  a  month.  Each  such  director,  when  ap- 
pointed or  elected,  shall  take  an  oath  that  he  will,  as  far  as  the 
duty  devolves  on  him,  diligently  and  honestly  administer  the 
affairs  of  such  bank,  and  will  not  knowingly  violate  or  willfully 
permit  to  be  violated  any  of  the  provisions  of  law  applicable 
to  such  bank,  and  that  he  is  the  owner  in  good  faith  and  in  his 
own  right  of  shares  of  stock  of  the  par  value  required  by  sec- 
tion ten  of  this  act,  subscribed  by  him  or  standing  in  his  name 
on  the  books  of  the  bank,  and  that  the  same  to  an  amount 
equal  to  the  par  value  of  at  least  five  hundred  dollars,  are  not 
hypothecated  or  in  any  way  pledged  as  security  for  any  loan 
or  debt.   Such  oath  shall  be  subscribed  by  the  director  making 


10  CALIFORNIA   BANK   ACT 

it,  certified  by  the  officer  before  whom  it  is  taken,  and  imme- 
diately transmitted  to  the  superintendent  of  banks  and  filed 
and  preserved  in  his  office ;  provided,  the  managers  or  agents 
residing  in  this  state,  of  a  foreign  corporation  transacting  any 
banking  business  in  this  state,  shall  take  an  oath  that  they  will, 
as  far  as  the  duty  devolves  on  them,  diligently  and  honestly 
administer  the  affairs  of  such  bank,  and  will  not  knowingly 
violate  or  wilfully  permit  to  be  violated  any  of  the  provisions 
of  law  applicable  to  such  bank.  Such  oath  shall  be  subscribed 
by  the  managers  or  agents  taking  it,  certified  by  the  officer  be- 
fore whom  it  is  taken,  and  immediately  transmitted  to  the  su- 
perintendent of  banks  and  filed  and  preserved  in  his  office. 

Sec.  12.  No  person,  firm,  company,  copartnership  or  cor- 
poration, either  domestic  or  foreign,  not  subject  to  the  super- 
vision of  the  superintendent  of  banks,  and  not  required,  by  the 
provisions  of  this  act,  to  report  to  him,  and  which  has  not  re- 
ceived a  certificate  to  do  a  banking  business  from  the  superin- 
tendent of  banks,  shall  advertise  that  he  or  it  is  receiving  or  ac- 
cepting money  or  savings,  and  issuing  notes  or  certificates  of 
deposit  therefor,  or  shall  make  use  of  any  office  sign,  at  the 
place  where  such  business  is  transacted,  having  thereon  any 
artificial  or  corporate  name,  or  other  words  indicating  that 
such  place  or  office  is  the  place  or  office  of  a  bank  or  trust  com- 
pany, that  deposits  are  received  there  or  payments  made  on 
check,  or  any  other  form  of  banking  business  transacted,  nor 
shall  any  such  person  or  persons,  firm,  company,  copartner- 
ship or  corporation,  domestic  or  foreign,  make  use  of  or  circu- 
late any  letterheads,  billheads,  blank  notes,  blank  receipts, 
certificates  or  circulars,  or  any  written  or  printed,  or  partly 
written  and  partly  printed,  paper,  whatever,  having  thereon 
any  artificial  or  corporate  name  or  other  word  or  words  indi- 
cating that  such  business  is  the  business  of  a  bank,  savings 
bank  or  trust  company ;  nor  shall  any  such  person,  firm,  com- 
pany, copartnership  or  corporation,  or  any  agent  of  a  foreign 
corporation  not  having  an  established  place  of  business  in  this 
state,  solicit  or  receive  deposits  or  transact  business  in  the  way 
or  manner  of  a  bank,  savings  bank  or  trust  company,  or  in  such 
a  way  or  manner  as  to  lead  the  public  to  believe  that  its  busi- 


CALIFORNIA   BANK   ACT  11 

ness  is  that  of  a  bank,  savings  bank  or  trust  company. 
Nor  shall  any  person,  firm,  company,  copartnership  or  cor- 
poration, domestic  or  foreign,  not  subject  to  the  supervision 
of  the  superintendent  of  banks,  and  not  required  by  the 
provisions  of  this  act  to  report  to  him,  and  which  has  not  re- 
ceived from  the  superintendent  of  banks  a  certificate  to  do  a 
banking  business,  hereafter  transact  business  under  any  name 
or  title  which  contains  the  word  "bank,"  or  "banker,"  or 
"banking,"  or  "savings  bank,"  or  "savings"  or  "trust"  or 
"trustee"  or  "trust  company";  provided,  that  this  section 
shall  not  apply  to  the  corporate  name  of  any  building  and  loan 
association  now  or  heretofore  doing  business  in  this  state ;  and 
provided,  further,  that  any  such  association  having  in  its  cor- 
porate name  words  not  clearly  indicating  the  nature  of  its  busi- 
ness shall,  on  all  signs,  letterheads  and  advertising  matter, 
state  "This  is  a  building  and  loan  association"  or  words  to 
that  effect ;  and  provided,  further,  that  any  building  and  loan 
association  may  borrow  money,  issue  investment  certificates  or 
evidences  of  indebtedness,  stating  the  rate  of  interest  and 
terms  and  conditions  of  repayment,  and  do  such  other  business 
as  may  be  authorized  by  the  laws  of  the  state  relating  to  build- 
ing and  loan  associations ;  and  provided,  further,  that  no  such 
association  shall  advertise  or  hold  itself  out  to  the  public  as  a 
savings  bank.  Any  person,  firm,  company,  copartnership  pr 
corporation,  domestic  or  foreign,  violating  any  provision  of 
this  section  shall  forfeit  to  the  state  one  hundred  dollars  a  day 
for  every  day  or  part  thereof  during  which  such  violation  con- 
tinues. Upon  action  brought  by  the  superintendent  of  banks 
the  court  may  issue  an  injunction  restraining  any  such  person, 
firm,  company,  copartnership  or  corporation  from  further 
using  such  words  in  violation  of  the  provisions  of  this  section 
or  from  further  transacting  business  in  such  a  way  or  manner 
as  to  lead  the  public  to  believe  that  its  business  is  that  of  a 
bank,  savings  bank  or  trust  company  during  the  pendency  of 
such  action  and  for  all  time  and  may  make  such  other  order  or 
decree  as  equity  and  justice  may  require. 

Sec.  12a.    Every  person,  firm,  company,  copartnership  or 
corporation,  domestic  or  foreign,  advertising  that  he  or  it  is 


12  CALIFORNIA   BANK   ACT 

receiving  or  accepting  money  or  savings,  and  issuing  notes  or 
certificates  of  deposit  therefor,  or  advertising  that  he  or  it  is 
transacting  the  business  of  a  bank,  savings  bank  or  trust  "com- 
pany, or  making  use  of  any  office  sign  at  the  place  where  such 
business  is  transacted,  having  thereon  any  artificial  or  cor- 
porate name,  or  other  words  indicating  that  such  place  or  office 
is  the  place  or  office  of  a  bank,  or  trust  company,  or  that  de- 
posits are  received  there  or  payments  made  on  check,  or  that 
interest  is  paid  on  deposits,  or  that  certificates  of  deposit, 
either  with  or  without  interest  are  being  issued,  or  that  any 
other  form  of  banking  business  is  transacted,  and  every  person, 
firm,  company,  copartnership  or  corporation,  domestic  or  for- 
eign, making  use  of  or  circulating  any  letterheads,  billheads, 
blank  notes,  blank  receipts,  certificates  or  circulars,  or  any 
written  or  printed,  or  partly  written  and  partly  printed,  paper, 
whatever,  having  thereon  any  artificial  or  corporate  name,  or 
advertising  that  such  business  is  the  business  of  a  bank,  sav- 
ings bank  or  trust  company,  must  have  the  proper  capital  stock 
paid  in  and  set  aside  for.  the  purpose  of  transacting  such  busi- 
ness, and  must  have  received  from  the  superintendent  of  banks, 
as  provided  for  in  this  act,  a  certificate  to  do  a  banking  busi- 
ness. Any  person,  firm,  company,  copartnership  or  corpora- 
tion, domestic  or  foreign,  violating  any  provision  of  this  sec- 
tion shall  forfeit  to  the  state  one  hundred  dollars  a  day  for 
every  day  or  part  thereof  during  which  such  violation  con- 
tinues. Upon  action  brought  by  the  superintendent  of  banks 
the  court  may  issue  an  injunction  restraining  any  such  person, 
firm,  company,  copartnership  or  corporation  from  further  vio- 
lating any  provision  of  this  section,  and  may  make  such  further 
order  or  decree  as  equity  and  justice  may  require.  Every  per- 
son, firm,  company,  copartnership  or  corporation  doing  any  of 
the  things  or  transacting  any  of  the  business  defined  in  this 
section,  must  transact  such  business  according  to  the  provisions 
of  the  bank  act,  and  the  superintendent  of  banks  or  his  deputy 
or  examiners  shall  have  authority  to  examine  the  accounts, 
books  and  papers  of  every  such  person,  firm,  company,  copart- 
nership or  corporation,  domestic  or  foreign,  in  order  to  ascer- 
tain whether  such  person,  firm,  company,  copartnership  or 


CALIFORNIA   BANK   ACT  13 

corporation  has  violated  or  is  violating  any  provisions  of  this 
section ;  provided,  that  this  section  shall  not  apply  to  the  cor- 
porate name  of  any  building  and  loan  association  now  or  here- 
tofore doing  business  in  this  state ;  and  provided,  further,  that 
any  such  association  having  in  its  corporate  name  words  not 
clearly  indicating  the  nature  of  its  business  shall,  on  all  signs, 
letterheads  and  advertising  matter,  state :  ' '  This  is  a  building 
and  loan  association"  or  words  to  that  effect;  and  provided, 
further,  that  any  building  and  loan  association  may  borrow 
money,  issue  investment  certificates  or  evidences  of  indebted- 
ness, stating  the  rate  of  interest  and  terms  and  conditions  of 
repayment,  and  do  such  other  business  as  may  be  authorized  by 
the  laws  of  the  state  relating  to  building  and  loan  associations ; 
and  provided,  further,  that  no  such  association  shall  advertise 
or  hold  itself  out  to  the  public  as  a  savings  bank. 

Sec.  12b.  Nothing  in  this  act  shall  be  construed  or  held  to 
apply  to  any  corporation  organized  under  the  laws  of  any  other 
state  which  is  authorized  by  its  charter  or  articles  of  incorpora- 
tion to  transact  the  business  of  life  insurance  and  also  to  be 
known  as  and  to  transact  business  as  a  trust  company  and 
which  shall  have  complied  with  the  laws  of  this  state  affecting 
the  transaction  in  this  state  of  the  business  of  life  insurance  by 
a  foreign  corporation  and  which  shall  have  heretofore  engaged 
in  such  business  of  life  insurance  in  this  state,  in  such  manner 
as  to  forbid  or  prevent  its  making  use  of  its  corporate  title  in 
its  life  insurance  business  in  this  state  in  any  such  way  and  to 
any  such  extent  as  it  might  have  made  use  of  the  same  if  this 
act  had  not  been  passed. 

Sec.  12c.  Any  corporation  organized  under  the  laws  of  any 
country  or  state  other  than  this  state  which  has  complied  with 
all  of  the  laws  of  this  state  pertaining  to  foreign  corporations 
and  is  not  engaged  in  the  business  of  banking  or  receiving 
money  on  deposit  in  this  state  may  lend  money  in  this  state 
and,  for  that  purpose,  may  maintain  offices  in  this  state,  and 
sue  and  be  sued  in  this  state  under  its  proper  corporate  name, 
notwithstanding  any  prohibitions  contained  in  this  act  as  to 
the  use  of  any  words  in  the  name,  signs  or  advertising  matter 


14  CALIFORNIA   BANK   ACT 

of  corporations  not  under  the  supervision  of  the  superinten- 
dent of  banks. 

Sec.  13.  Nothing  in  this  act  contained  shall  be  deemed  to 
prohibit  any  person  or  copartnership  or  corporation  or  any 
telegraph  company,  express  company  or  other  common  carrier 
from  engaging  in  the  business  of  buying  or  selling  exchange 
or  of  issuing  letters  of  credit ;  providing  such  person,  copart- 
nership, corporation,  company  or  common  carrier  shall  have 
received  a  license  from  the  superintendent  of  banks  to  engage 
in  such  business.  Such  license  may  be  issued  upon  application 
and  the  payment  of  a  fee  of  fifty  dollars  and  may  be  refused  or 
revoked  by  the  superintendent  of  banks  at  his  discretion. 

Sec.  14.  No  bank,  or  officer  thereof,  shall  advertise  in  any 
manner,  or  publish  any  statement  of  the  capital  authorized  or 
subscribed,  unless  it  or  he  advertise  and  publish  in  connection 
therewith,  the  amount  of  capital  actually  paid  up.  No  bank 
shall  publish  a  statement  of  its  resources  or  liabilities  in  con- 
nection with  those  of  any  other  bank,  unless  such  statement 
shall  show  the  resources  and  liabilities  of  each  bank  separately ; 
nor  shall  surplus  and  undivided  profits  be  advertised  as  an 
aggregate. 

Sec.  15.  All  amounts  of  money  heretofore  or  hereafter  de- 
posited with  any  bank  to  the  credit  of  depositors  who  have  not 
made  a  deposit  on  said  account  or  withdrawn  any  part  thereof 
or  the  interest  and  which  shall  have  remained  unclaimed  for 
more  than  twenty  years  after  the  date  of  such  deposit,  or  with- 
drawal of  any  part  of  principal  or  interest,  and  where  neither 
the  depositor  or  any  claimant  has  filed  any  notice  with  such 
bank  showing  his  or  her  present  residence,  shall,  with  the  in- 
crease and  proceeds  thereof,  be  deposited  with  the  state  treas- 
urer after  judgment  in  the  manner  provided  in  the  Code  of 
Civil  Procedure.  At  the  time  of  issuing  the  summons  in  the 
action  provided  for  in  section  1273  of  the  Code  of  Civil  Pro- 
cedure, the  clerk  shall  also  issue  a  notice  signed  by  him,  giving 
the  title  and  number  of  said  action,  and  referring  to  the  com- 
plaint therein,  and  directed  to  all  persons,  other  than  those 
named  as  defendants  therein,  claiming  any  interest  in  any  de- 


CALIFORNIA   BANK   ACT  15 

posit  mentioned  in  said  complaint,  and  requiring  them  to  ap- 
pear within  sixty  days  after  the  first  publication  of  such  sum- 
mons, and  show  cause,  if  any  they  have,  why  the  moneys 
involved  in  said  action  should  not  be  deposited  with  the  state 
treasurer  as  in  said  section  provided,  and  notifying  them  that 
if  they  do  not  so  appear  and  show  cause,  the  state  will  apply 
to  the  court  for  the  relief  demanded  in  the  complaint.  A  copy 
of  said  notice  shall  be  attached  to  and  published  with  the  copy 
of  said  summons  required  to  be  published  by  said  section,  and 
at  the  end  of  the  copy  of  such  notice  so  published  there  shall 
be  a  statement  of  the  date  of  the  first  publication  of  said  sum- 
mons and  notice.  Any  person  interested  may  appear  in  said 
action  and  become  a  party  thereto.  Upon  the  completion  of  the 
publication  of  the  summons  and  notice,  and  the  service  of  the 
summons  on  the  defendant  bank,  or  banks,  as  in  said  section 
1273  of  the  Code  of  Civil  Procedure  provided,  the  court  shall 
have  full  and  complete  jurisdiction  over  the  state,  and  the  said 
deposits  and  of  the  person  of  every  one  having  or  claiming  any 
interest  in  the  said  deposits,  or  any  of  them,  and  shall  have  full 
and  complete  jurisdiction  to  hear  and  determine  the  issues 
therein,  and  render  the  appropriate  judgment  thereon.  The 
president  or  managing  officer  of  every  bank  must,  within  fif- 
teen days  after  the  first  day  of  January  of  every  year,  return 
to  the  superintendent  of  banks  and  to  the  state  controller  a 
sworn  statement  showing  the  names  of  depositors  known  to  be 
dead,  or  who  have  not  made  further  deposits,  or  withdrawn  any 
moneys  during  the  preceding  twenty  years.  Such  statement 
shall  show  in  detail  the  following  matters,  viz : 

First — The  name  and  last  known  place  of  residence  or  post 
office  address  of  the  person  making  such  deposit ; 

Second — The  amount  and  date  of  such  deposit  and  whether 
the  same  are  in  moneys  or  securities,  and  if  the  latter,  the 
nature  of  the  same ; 

Third — The  interest  due  on  such  deposit,  if  any,  and  the 
amount  thereof; 

Fourth — The  sum  total  of  such  deposit,  together  with  the 
interest  added  thereto  due  from  such  bank  on  account  of  such 
deposit  or  deposits  and  the  interest  thereon  to  such  depositor, 


16  CALIFORNIA   BANK   ACT 

but  nothing  contained  herein  shall  require  any  corporation  or 
person  renting  lock  boxes  or  safes  in  vaults  for  storage  pur- 
poses to  open  or  report  concerning  property  stored  therein. 
Such  reports  itemized  as  aforesaid  shall  be  signed  by  the  per- 
son making  the  same  and  shall  be  sworn  to  before  a  person 
competent  to  administer  oaths  as  a  full,  complete  and  truthful 
statement  of  each  of  the  items  therein  contained. 

The  president  or  managing  officer  of  every  bank  must,  within 
fifteen  days  after  the  first  day  of  January  of  every  odd  num- 
bered year,  return  to  the  superintendent  of  banks  a  sworn 
statement  showing  the  names  of  depositors  known  to  be  dead, 
or  who  have  not  made  further  deposits,  or  withdrawn  any 
moneys  during  the  preceding  ten  years.  Such  statements  shall 
show  the  amount  of  the  account,  the  depositor's  last  known 
place  of  residence  or  post  office  address,  and  the  fact  of  death, 
if  known  to  such  president  or  managing  officer.  Such  presi- 
dent or  managing  officer  must  give  notice  of  these  deposits  in 
one  or  more  newspapers  published  in  or  nearest  to  the  town  or 
city  where  such  bank  has  its  principal  place  of  business,  at 
least  once  a  week  for  four  consecutive  weeks,  the  cost  of  such 
publication  to  be  paid  pro  rata  out  of  such  unclaimed  deposits. 
This  section  does  not  apply  to  any  deposit  made  by  or  in  the 
name  of  a  person  known  to  the  president  or  managing  officer 
to  be  living.  The  superintendent  of  banks  must  incorporate  in 
his  subsequent  report  such  returns  made  to  him  as  provided  in 
this  section.  If  any  president  or  managing  officer  of  any  bank 
neglects  or  refuses  to  make  the  sworn  statements  required  by 
this  section  such  bank  shall  forfeit  to  the  State  of  California 
the  sum  of  one  hundred  dollars  a  day  for  each  day  such  default 
shall  continue.  Any  president  or  managing  officer  of  any  bank 
who  violates  any  of  the  provisions  of  this  section  shall  forfeit 
to  the  State  of  California  the  sum  of  one  hundred  dollars  a 
day  for  each  and  every  day  such  violation  shall  continue.  For 
the  purposes  of  this  section  all  deposits  received  by  any  bank 
under  the  provision  of  section  thirty-one  or  section  thirty-one  a 
of  this  act  shall  be  deemed  to  have  been  deposited  with  such 
bank  at  the  time  the  deposit  was  made  with  the  bank  from 
which  the  deposit  was  transferred;   provided,  that  any  bank 


CALIFORNIA   BANK   ACT  17 

which  shall  make  any  deposit  with  the  state  treasurer  in  con- 
formity with  the  provisions  of  this  section  shall  not  thereafter 
be  liable  to  any  person  for  the  same  and  any  action  which  may 
be  brought  by  any  person  against  any  bank  for  moneys  so  de- 
posited with  the  state  treasurer  shall  be  defended  by  the  at- 
torney general  without  cost  to  such  bank. 

Sec.  16.  When  any  deposit  with  a  bank  shall  be  made  by  or 
in  the  name  of  any  married  woman  or  minor,  the  same  shall 
be  held  for  the  exclusive  right  and  benefit  of  such  depositor, 
and  free  from  the  control  or  lien  of  all  other  persons,  except 
creditors,  and  shall  be  paid,  together  with  the  dividends,  if 
any,  and  interest,  if  any,  thereon  to  the  person  in  whose  name 
deposits  shall  have  been  made,  and  the  receipt  or  acquittance 
of  such  minor  shall  be  a  valid  and  sufficient  release  and  dis- 
charge for  such  deposit,  or  any  part  thereof,  to  the  bank.  When 
any  deposit  with  a  bank  shall  be  made  by  any  person  in  trust 
for  another,  and  no  other  or  further  notice  of  the  existence  and 
terms  of  a  legal  and  valid  trust  shall  have  been  given  in  writ- 
ing to  such  bank,  in  the  event  of  the  death  of  the  trustee,  the 
same  or  any  part  thereof,  together  with  the  dividends  or  in- 
terest, if  any,  thereon,  may  be  paid  to  the  person  for  whom  the 
deposit  was  made.  When  a  deposit  with  a  bank  shall  be  made 
by  any  person  in  the  names  of  such  depositor  and  another  per- 
son or  persons,  and  in  form  to  be  paid  to  either  or  the  survivor 
or  survivors  of  them,  such  deposit  thereupon  and  any  additions 
thereto  made  by  either  of  such  persons  upon  the  making 
thereof,  shall  become  the  property  of  such  person  as  joint 
tenants,  and  the  same,  together  with  all  interest  thereon,  shall 
be  held  for  the  exclusive  use  of  the  persons  so  named,  and  may 
be  paid  to  either  during  the  lifetime  of  all  or  any  or  to  the 
survivor  or  survivors  after  the  death  of  one  or  more  of  them, 
and  such  payments  and  the  receipt  or  acquittance  of  the  one 
to  whom  such  payment  is  made  shall  be  valid  and  sufficient 
release  and  discharge  to  said  bank  for  all  payments  made  on 
account  of  such  deposit. 

The  surviving  husband  or  wife,  or  the  guardian  of  the  estate 
of  any  insane  or  incompetent  husband  or  wife  of  any  deceased 
person,  or,  if  no  husband  or  wife  is  living,  then  the  children 


18  CALIFORNIA   BANK   ACT 

or  the  guardian  of  the  estates  of  any  minor  or  insane  or  incom- 
petent children  of  said  decedent,  or,  if  no  children  are  living, 
then  the  father  or  mother  or  guardian  of  the  estate  of  any 
insane  or  incompetent  father  or  mother  of  such  decedent,  and 
if  neither  the  father  or  mother  is  living,  then  the  brothers  and 
sisters  or  the  guardian  of  the  estates  of  any  minor  or  insane 
or  incompetent  brothers  and  sisters  of  such  decedent,  may, 
without  procuring  letters  of  administration,  collect  of  any 
bank  any  sum  which  said  deceased  may  have  left  on  deposit 
in  such  bank  at  the  time  of  his  or  her  death ;  provided,  such 
deposit  shall  not  exceed  the  sum  of  one  thousand  dollars. 
Any  bank,  upon  receiving  an  affidavit  stating  that  said  deposi- 
tor is  dead,  and  that  affiant  is  the  surviving  husband  or  wife  or 
the  guardian  of  the  estate  of  an  insane  or  incompetent  sur- 
viving husband  or  wife,  as  the  case  may  be,  of  said  decedent, 
or  stating  that  decedent  left  no  husband  or  wife,  and  that  affi- 
ant is,  or  affiants  are,  the  children,  or  the  guardians  of  the 
estates  of  the  minor,  insane  or  incompetent  children,  as  the 
case  may  be,  of  said  decedent,  or  stating  that  decedent  left 
neither  husband,  wife  nor  children,  and  that  affiant  is  the 
father  or  mother,  or  the  guardian  of  the  estate  of  the  insane 
or  incompetent  father  or  mother,  as  the  case  may  be,  of  said 
decedent,  or  stating  that  the  decedent  left  neither  husband, 
wife,  children,  father  nor  mother,  and  that  affiants  are  the 
brothers  and  sisters  or  the  guardians  of  the  estates  of  the 
minor,  insane  or  incompetent  brothers  and  sisters,  as  the  case 
may  be,  of  said  decedent,  and  that  the  whole  amount  that 
decedent  left  on  deposit  in  any  and  all  banks  of  deposit  of  this 
state,  does  not  exceed  the  sum  of  one  thousand  dollars,  may 
pay  to  said  affiant  or  affiants,  any  deposit  of  said  decedent,  if 
the  same  does  not  exceed  the  sum  of  one  thousand  dollars,  and 
the  receipt  of  such  affiant  is  sufficient  acquittance  therefor; 
provided,  however,  that  whenever  the  affidavit  herein  men- 
tioned is  made  by  any  guardian  it  shall  be  accompanied  by  a 
certified  copy  of  the  letters  of  guardianship  issued  to  such 
guardian  attached  to  a  certificate  of  the  clerk  of  the  court 
having  appointed  such  guardian  to  the  effect  that  the  said 
letters  of  guardianship  have  not  been  revoked. 


CALIFORNIA  BANK  ACT  19 

Sec.  17.  Every  bank  now  in  existence  or  hereafter  organ- 
ized shall  keep  in  its  offices,  in  a  place  accessible  to  the  stock- 
holders, depositors,  and  creditors  thereof,  and  for  their  use,  a 
book  containing  a  list  of  stockholders  in  such  corporation,  and 
the  number  of  shares  of  stock  held  by  each;  and  every  such 
bank  shall  keep  posted  in  its  office,  in  a  conspicuous  place, 
accessible  to  the  public  generally,  a  notice  signed  by  the  presi- 
dent or  secretary,  showing : 

1.  The  names  of  the  directors  of  such  bank. 

2.  The  number  and  the  par  value  of  the  shares  of  stock 
held  by  each  director. 

The  entries  on  such  book  and  such  notice  shall  be  made  and 
posted  within  twenty-four  hours  after  any  transfer  of  stock, 
and  shall  be  prima  facie  evidence  against  each  director  and 
stockholder  of  the  number  of  shares  of  stock  held  by  each. 

(Sec.  18.    Repealed  1913.) 

Sec.  19.  The  aggregate  of  paid-up  capital  together  with 
the  surplus,  of  every  commercial  bank,  must  equal  ten  per 
centum  of  its  deposit  liabilities;  such  deposit  liabilities  shall 
not  be  increased  when  such  proportion  of  paid-up  capital  and 
surplus  is  wanting,  and  in  no  event  shall  said  paid-up  capital 
be  less  than  the  minimum  paid-up  capital  provided  by  this  act ; 
provided,  however,  that  the  aggregate  of  paid-up  capital  and 
surplus  of  every  savings  bank  having  a  capital  stock,  and 
the  reserve  fund  of  every  savings  bank  without  a  capital 
stock,  must  equal  the  following  percentages  of  its  deposit 
liabilities : 

(a)  Ten  per  centum  of  any  amount  up  to  and  including 
two  million  dollars. 

( o)  Seven  and  one-half  per  centum  of  any  amount  in  ex- 
cess of  two  million  dollars  up  to  and  including  five  million 
dollars. 

(c)  Five  per  centum  of  any  amount  in  excess  of  five  mil- 
lion dollars  up  to  and  including  fifteen  million  dollars. 

(d)  Two  and  one-half  per  centum  of  any  amount  in  ex- 
cess of  fifteen  million  dollars  up  to  and  including  forty  million 
dollars. 


20  CALIFORNIA   BANK   ACT 

(e)  One  per  centum  of  any  amount  in  excess  of  forty  mil- 
lion dollars. 

The  deposits  shall  not  be  increased  if  such  proportion  of 
paid-up  capital  and  surplus  or  reserve  fund  to  deposit  lia- 
bilities is  not  maintained. 

Sec.  20.  Every  commercial  bank  shall  maintain  total  re- 
serves against  its  aggregate  deposits,  exclusive  of  state,  county 
and  municipal  deposits  for  the  re-payment  of  which  bonds 
have  been  deposited  as  security,  as  follows: 

1.  Eighteen  per  centum  of  such  deposits  if  such  bank  has 
its  principal  place  of  business  in  a  city  having  a  population  of 
one  hundred  thousand  or  over. 

2.  Fifteen  per  centum  of  such  deposits,  if  such  bank  is 
located  in  a  city  having  a  population  of  fifty  thousand  or  over 
and  less  than  one  hundred  thousand. 

3.  Twelve  per  centum  of  such  deposits  if  such  bank  is  lo- 
cated elsewhere  in  the  state. 

At  least  one-third  of  the  total  reserves  shall  be  maintained 
as  reserves  on  hand  and  shall  consist  of  gold  coin,  gold  bullion, 
United  States  gold  certificates  or  United  States  notes ;  in  addi- 
tion thereto,  at  least  one-sixth  of  the  total  reserves  shall  be 
maintained  as  reserves  on  hand  and  shall  consist  of  gold  coin, 
gold  bullion,  United  States  gold  certificates,  United  States 
notes  or  any  form  of  currency  authorized  by  the  laws  of  the 
United  States,  and  the  remainder  of  the  total  reserves  required 
by  the  provisions  of  this  section  shall  be  maintained  as  reserves 
on  deposit  or  as  reserves  on  hand;  such  reserves  on  hand  to 
consist  of  gold  coin,  gold  bullion,  United  States  gold  certifi- 
cates, United  States  notes  or  any  form  of  currency  authorized 
by  the  laws  of  the  United  States. 

If  any  bank  shall  have  become  a  member  of  a  federal  reserve 
bank,  it  may  maintain  as  reserves  on  deposit  with  such  federal 
reserve  bank  such  portion  of  its  total  reserves  as  shall  be 
required  of  members  of  such  federal  reserve  bank. 

If  any  bank  shall  not  maintain  the  total  reserves  required 
the  superintendent  of  banks  may  impose  a  penalty  upon  it, 
based  upon  the  length  of  time  such  encroachment  upon  its  total 


CALIFORNIA   BANK   ACT  21 

reserves  amounting  to  one  per  centum  or  more  of  its  aggregate 
deposits  shall  continue,  at  the  following  rates : 

1.  At  the  rate  of  six  per  centum  per  annum  upon  any  such 
encroachment  not  exceeding  two  per  centum  of  such  deposits. 

2.  At  the  rate  of  eight  per  centum  per  annum  upon  any 
additional  encroachment  in  excess  of  two  and  not  exceeding 
three  per  centum  of  such  deposits. 

3.  At  the  rate  of  ten  per  centum  per  annum  upon  any  addi- 
tional encroachment  in  excess  of  three  and  not  exceeding  four 
per  centum  of  such  deposits. 

4.  At  the  rate  of  twelve  per  centum  per  annum  upon  any 
additional  encroachment  in  excess  of  four  per  centum  of  such 
deposits. 

The  superintendent  of  banks  shall,  in  his  discretion,  upon 
the  nomination  of  any  bank,  designate  a  depositary  or  deposi- 
taries for  the  reserves  on  deposit  of  such  bank  provided  for  by 
this  act.  Except  as  otherwise  provided  in  this  section,  such 
depositary  shall  be  a  bank  or  national  banking  association 
located  in  this  state.  Every  reserve  depositary,  which  has  its 
principal  place  of  business  in  a  judicial  township  or  in  a  city 
located  in  this  state  in  which  the  population  is  less  than  fifty 
thousand,  shall  have  at  all  times  as  its  total  reserves  an  amount 
equal  to  the  total  reserves  required  by  the  provisions  of  this 
section  for  every  bank  which  has  its  principal  place  of  business 
in  a  city  having  a  population  of  fifty  thousand  or  over  and  less 
than  one  hundred  thousand.  But  no  bank  or  national  banking 
association  shall  hereafter  be  designated  as  a  depositary  of 
any  such  reserves  unless  it  shall  have  a  combined  capital  and 
surplus  of  not  less  than  the  following  amounts : 

1.  Two  hundred  fifty  thousand  dollars,  if  located  in  a  city 
which  has  a  population  of  three  hundred  thousand  or  over-, 

2.  Two  hundred  thousand  dollars,  if  located  in  a  city  which 
has  a  population  of  one  hundred  thousand  or  over  and  less 
than  three  hundred  thousand; 

3.  One  hundred  fifty  thousand  dollars,  if  located  in  a  city 
which  has  a  population  of  fifty  thousand  or  over  and  less  than 
one  hundred  thousand; 


22  CALIFORNIA   BANK   ACT 

4.  One  hundred  thousand  dollars,  if  located  elsewhere  in 
the  state. 

Such  depositary  may  also  be  a  banking  corporation  with  a 
capital  and  surplus  of  one  million  dollars  or  more,  located  in 
the  cities  of  New  York,  Chicago,  Boston,  St.  Louis,  or  Phila- 
delphia. 

If  the  total  reserves  of  any  bank  shall  be  less  than  the 
amount  required  by  this  section,  such  bank  shall  not  increase 
its  liabilities  by  making  any  new  loans  or  discounts,  otherwise 
than  by  discounting  bills  of  exchange  on  sight,  or  by  paying 
any  dividends  from  profits  until  the  full  amount  of  its  total 
reserves  has  been  restored.  The  superintendent  of  banks  may 
notify  any  bank  whose  total  reserves  shall  be  below  the  amount 
herein  required,  to  restore  such  total  reserves;  and,  if  it  shall 
fail  for  thirty  days  thereafter  to  restore  such  total  reserves, 
such  bank  shall  be  deemed  insolvent  and  may  be  proceeded 
against  under  the  provisions  of  this  act;  provided,  that  all 
deposits  of  money  herein  permitted  or  required  shall  comply 
with  the  provisions  of  section  forty-three  of  this  act. 

The  term,  ' '  reserves  on  hand, ' '  when  used  in  this  act,  means 
the  reserves  against  deposits  kept  in  the  vault  of  any  bank 
pursuant  to  the  provisions  of  this  act. 

The  term,  " reserves  on  deposit,"  when  used  in  this  act, 
means  the  reserves  against  deposits  maintained  by  any  bank 
pursuant  to  this  act  in  reserve  depositaries,  or  in  a  federal 
reserve  bank  of  which  such  bank  is  a  member,  and  not  in 
excess  of  the  amount  authorized  by  this  act. 

The  term,  "total  reserves,"  when  used  in  this  act,  means 
the  aggregate  of  reserves  on  hand  and  reserves  on  deposit 
maintained  pursuant  to  the  provisions  of  this  act. 

The  term,  "reserve  depositary,"  when  used  in  this  act, 
means  a  bank,  trust  company  or  banking  corporation  desig- 
nated by  the  superintendent  of  banks  on  the  nomination  of 
the  depositing  bank  as  a  depositary  for  reserves  on  deposit. 

Sec.  21.  The  directors  of  any  bank  having  a  capital  stock 
may,  at  certain  times,  and  in  such  manner  as  its  by-laws  pre- 
scribe, declare  and  pay  dividends  to  depositors  and  stock- 
holders of  so  much  of  the  profits  of  the  bank,  and  of  the  interest 


CALIFORNIA   BANK   ACT  23 

arising  from  the  capital,  surplus  and  deposits,  as  may  be  ap- 
propriated for  that  purpose  under  its  by-laws  or  under  its 
agreements  with  depositors,  but  every  such  bank  shall,  before 
the  declaration  of  any  such  dividend,  carry  at  least  one-tenth 
part  of  the  net  profits  of  the  stockholders  for  the  preceding 
half  year,  or  for  such  period  as  is  covered  by  the  dividend, 
to  its  surplus,  until  such  surplus  shall  amount  to  twenty-five 
per  centum  of  its  paid-up  capital  stock.  The  whole  or  any 
part  of  such  surplus,  if  held  as  the  exclusive  property  of  the 
stockholders,  may  at  any  time  be  converted  into  paid  in  capital, 
in  which  event  such  surplus  shall  be  restored  in  the  manner 
above  provided  until  it  amounts  to  twenty-five  per  centum  of 
the  aggregate  paid-up  capital  stock.  Subject  to  the  provisions 
of  section  nineteen  of  this  act,  any  losses  sustained  by  any 
such  bank  in  excess  of  its  undivided  profits  may  be  charged 
to  and  paid  from  its  surplus,  in  which  event  such  surplus 
shall  be  restored  in  the  manner  above  provided,  to  the  amount 
required  by  law ;  provided,  however,  that  any  bank  which  has 
invested  any  portion  of  its  surplus  in  its  bank  premises,  fur- 
niture and  fixtures,  vaults,  or  safe  deposit  vaults,  and  boxes 
necessary  or  proper  to  carry  on  its  banking  business  shall  not 
be  permitted  to  charge  any  loss  to  that  portion  of  its  surplus 
so  invested.  A  larger  surplus  may  be  created  and  nothing 
herein  contained  shall  be  construed  as  prohibitory  thereof. 
The  capital  and  assets  of  any  such  bank  are  a  security  to 
depositors  and  stockholders,  depositors  having  the  priority  of 
security  over  stockholders. 

Sec.  21a.  No  bank,  banker,  or  bank  officer,  shall  give 
preference  to  any  depositor  or  creditor  by  pledging  the  assets 
of  the  bank  as  collateral  security,  except  as  otherwise  author- 
ized by  law ;  provided  that  any  commercial  bank,  or  commer- 
cial department  of  a  departmental  bank,  may  borrow  money 
for  temporary  purposes,  and  may  pledge  assets  of  said  com- 
mercial bank,  or  commercial  department  of  said  departmental 
bank,  not  exceeding  fifty  per  centum  in  excess  of  the  amount 
borrowed,  as  collateral  security  therefor;  provided,  that  any 
public  moneys,  or  postal  savings  moneys,  deposited  with  any 
such  bank  under  any  provision  of  law,  shall  not  be  construed 


24  CALIFORNIA   BANK   ACT 

as  ' '  borrowed  money ' '  within  the  meaning  of  this  section.  No 
bank  shall  at  any  time,  without  permission  of  the  superintend- 
ent of  banks,  borrow  an  amount  exceeding  the  amount  of  its 
paid-up  capital  stock  and  surplus  at  such  time  actually  paid 
in  and  remaining  undiminished  by  losses  or  otherwise.  No 
bank  shall  make  partial  payments  upon  any  certificate  of  de- 
posit. In  no  case  shall  an  overdraft  of  more  than  ninety  days 
standing  be  allowed  as  an  asset  of  any  bank.  Any  debt  due 
to  any  commercial  bank,  on  which  interest  is  past  due  and 
unpaid  for  the  period  of  one  year,  unless  the  same  is  well 
secured,  and  is  in  process  of  collection,  shall  be  considered  a 
bad  debt  and  shall  be  charged  off  to  the  profit  and  loss  account 
at  the  expiration  of  that  time. 

Sec.  22.  Any  corporation  authorized  by  its  articles  of  in- 
corporation so  to  do,  may  combine  the  business  of  a  commer- 
cial bank  and  savings  bank  and  trust  company,  or  any  one  or 
more  or  all  of  them ;  provided,  that  no  corporation  authorized 
to  transact  a  trust  business  and  which  is  also  organized  to  en- 
gage in  the  business  of  title  insurance,  shall  engage  in  or  com- 
bine the  business  of  a  commercial  bank  or  savings  bank. 

Sec.  23.  When  a  bank  desires  to  do  a  departmental  busi- 
ness, it  shall  first  obtain  the  consent  of  the  superintendent  of 
banks,  and  in  its  application  therefor,  file  a  statement  making 
a  segregation  of  its  capital  and  surplus  for  each  department. 
Such  capital  and  surplus,  when  so  apportioned  and  approved 
by  the  superintendent  of  banks,  shall  be  considered  and  treated 
as  the  separate  capital  and  surplus  of  such  department  as  if 
each  department  was  a  separate  bank.  Thereafter  a  bank  may, 
from  time  to  time,  with  the  previous  consent  and  approval  of 
the  superintendent  of  banks  and  subject  to  the  provisions  of 
section  nineteen  of  this  act,  change  any  segregation  and  ap- 
portionment of  capital  and  surplus  previously  made  and  make 
a  new  segregation  and  apportionment  of  its  capital  and  sur- 
plus. Every  bank  hereafter  organized  doing  a  departmental 
business  shall  have  paid  up,  in  cash,  capital  stock  as  follows : 

(a)  In  any  locality  in  which  the  population  does  not  exceed 
five  thousand  persons,  not  less  than  twenty-five  thousand  dol- 


CALIFORNIA   BANK   ACT  25 

]ars  if  it  transacts  both  a  commercial  and  savings  business,  or 
not  less  than  one  hundred  twenty-five  thousand  dollars,  if 
it  transacts  both  a  commercial  and  trust  business,  or  not  less 
than  one  hundred  twenty-five  thousand  dollars  if  it  transacts 
both  a  savings  and  trust  business  and  not  less  than  one  hun- 
dred twenty-five  thousand  dollars  if  it  transacts  a  commercial, 
savings  and  trust  business. 

(b)  In  any  city  in  which  the  population  is  more  than  five 
thousand  persons,  but  does  not  exceed  twenty-five  thousand 
persons,  not  less  than  fifty  thousand  dollars  if  it  transacts 
both  a  commercial  and  savings  business,  or  not  less  than  one 
hundred  fifty  thousand  dollars  if  it  transacts  both  a  commer- 
cial and  trust  business,  or  not  less  than  one  hundred  fifty 
thousand  dollars  if  it  transacts  both  a  savings  and  trust  busi- 
ness, and  not  less  than  one  hundred  fifty  thousand  dollars  if 
it  transacts  a  commercial,  savings  and  trust  business. 

(c)  In  any  city  in  which  the  population  is  more  than 
twenty-five  thousand  persons  but  does  not  exceed  one  hundred 
thousand  persons,  not  less  than  one  hundred  thousand  dollars, 
if  it  transacts  both  a  commercial  and  savings  business,  or  not 
less  than  two  hundred  thousand  dollars  if  it  transacts  both  a 
commercial  and  trust  business,  or  not  less  than  two  hundred 
thousand  dollars  if  it  transacts  both  a  savings  and  trust  busi- 
ness, and  not  less  than  two  hundred  thousand  dollars  if  it 
transacts  a  commercial,  savings  and  trust  business. 

( d)  In  any  city  in  which  the  population  is  more  than  one 
hundred  thousand  persons  but  does  not  exceed  two  hundred 
thousand  persons,  not  less  than  two  hundred  thousand  dollars, 
if  it  transacts  both  a  commercial  and  savings  business,  or  not 
less  than  four  hundred  thousand  dollars  if  it  transacts  both  a 
commercial  and  trust  business,  or  not  less  than  four  hundred 
thousand  dollars  if  it  transacts  both  a  savings  and  trust  busi- 
ness, and  not  less  than  four  hundred  thousand  dollars  if  it 
transacts  a  commercial,  savings  and  trust  business. 

(e)  In  any  city  in  which  the  population  exceeds  two  hun- 
dred thousand  persons,  not  less  than  three  hundred  thousand 
dollars  if  it  transacts  both  a  commercial  and  savings  business, 
or- not  less  than  five  hundred  thousand  dollars  if  it  transacts 


26  CALIFORNIA   BANK   ACT 

both  a  commercial  and  trust  business,  or  not  less  than  five  hun- 
dred thousand  dollars  if  it  transacts  both  a  savings  and  trust 
business,  and  not  less  than  five  hundred  thousand  dollars  if  it 
transacts  a  commercial,  savings  and  trust  business. 

The  foregoing  classification  shall  not  apply  to  any  bank  al- 
ready in  existence  which  has  received  from  the  superintendent 
of  banks  a  certificate  to  do  a  banking  business;  nor  to  any 
bank  the  location  of  which  shall  have  been  included  by  an- 
nexation or  consolidation  within  the  limits  of  a  city  of  a  class 
requiring  a  larger  capitalization,  but  no  bank  thus  excepted 
shall  be  permitted  to  establish  any  new  branch  office  as  pro- 
vided in  section  nine  of  this  act  or  to  remove  its  place  of  busi- 
ness from  the  original  limits  of  the  city  or  township  wherein 
it  was  located  prior  to  such  annexation  or  consolidation  until 
it  shall  have  the  capital  required  of  banks  in  such  city  not 
within  said  exception.  Such  excepted  banks  may  not  in  any 
case  decrease  their  capital  stock  but  may  increase  the  same 
in  the  manner  provided  by  law  to  an  amount  either  greater 
or  less  than  that  required  of  banks  in  such  city  not  within  said 
exception.  The  capital  stock  referred  to  herein  shall  be  in- 
creased from  time  to  time  and  to  the  same  extent  as  provided 
for  in  section  nineteen  of  this  act. 

For  the  purposes  of  this  act,  the  population  shown  and  de- 
termined by  the  last  preceding  federal  census,  or  any  subse- 
quent census  compiled  and  certified  under  any  law  of  this  state, 
shall  be  deemed  to  be  the  population  of  any  city  in  which  any 
such  bank  is  to  be  organized.  If  the  principal  place  of  business 
of  any  bank  so  organized  is  located  outside  of  the  corporate 
limits  of  any  city,  then  the  population  of  that  portion  of  the 
judicial  township  in  which  said  bank  is  to  have  its  principal 
place  of  business,  which  is  not  included  within  the  boundaries 
of  any  municipal  corporation,  as  such  population  is  shown  and 
determined  by  such  federal  or  subsequent  official  census,  shall 
be  the  basis  for  classification  under  the  provisions  of  this  act. 

Sec.  24.  Every  bank,  before  it  commences  to  do  business 
or  before  it  opens  a  new  department  and  commences  to  transact 
business  in  or  under  such  new  department,  shall  obtain  the 
certificate  of  the  superintendent  of  banks  for  the  opening  of 


CALIFORNIA   BANK   ACT  27 

each  of  the  departments  specified.  Each  certificate  herein 
provided  for  shall  be  given  when  the  superintendent  shall,  by 
the  examination  required  by  this  act,  have  satisfied  himself 
that  the  proper  amount  of  cash  has  been  paid  in  as  capital 
and  the  provisions  of  this  act  complied  with.  The  applicant 
shall  pay  for  the  certificate  for  each  department  a  fee  of  fifty 
dollars. 

Sec.  25.  Every  bank  shall  maintain  for  each  department 
total  reserves  equal  in  amount  to  that  required  by  this  act 
for  the  respective  business  conducted,  and  shall  keep  separate 
and  distinct  the  total  reserves  of  any  department  from  that 
of  any  other  department;  and  all  deposits  made  with  other 
banks,  whether  temporary  or  otherwise,  shall  be  assets  of  the 
respective  departments  by  which  they  were  made,  and  shall 
be  so  carried  on  the  books  of  such  other  banks,  and  shall  be 
repaid  only  upon  the  order  of  the  department  to  whose  credit 
they  stand.  No  department  shall  receive  deposits  from  any 
other  department  of  the  same  corporation ;  except  that  a  trust 
department,  in  proper  cases,  may  make  deposits  of  trust  or 
any  other  funds  under  its  control  with  the  savings  department 
of  the  same  corporation  and  may,  upon  order,  previously 
obtained,  of  any  court  having  jurisdiction  of  any  trust  or 
fund,  make  deposits  of  moneys  belonging  thereto  with  the 
commercial  department  of  the  same  corporation;  provided, 
however,  that  any  bank  having  departments  shall  have  the 
right  to  sell  and  transfer  any  bonds,  securities  or  loans  from 
one  department  to  another  upon  receipt  of  the  actual  value 
thereof,  if  such  bonds,  securities  or  loans  are,  under  the  pro- 
visions of  this  act,  a  legal  investment  for  the  department  pur- 
chasing the  same. 

Sec.  26.  Every  bank  having  different  departments  shall 
keep  separate  books  of  account  for  each  department  of  its 
business,  and  shall  be  governed  as  to  all  deposits,  reserves, 
investments  and  transactions  relating  to  each  department  by 
the  provisions  in  this  act  specifically  provided  for  the  respect- 
ive kind  of  business. 

It  shall  keep  all  investments  relating  to  the  savings  depart- 
ment entirely  separate  and  apart  from  the  investments  of  its 
other  department  or  departments. 


28  CALIFORNIA   BANK   ACT 

Every  bank  shall  conduct  the  business  of  all  its  departments 
in  one  building,  or  in  adjoining  buildings,  and  shall  keep 
entirely  separate  and  apart  in  each  department  the  cash,  se- 
curities and  property  belonging  to  such  department,  and  shall 
not  mingle  the  cash,  securities  and  property  of  one  department 
with  that  of  another. 

Sec.  27.  All  money  and  assets  belonging  to  each  depart- 
ment, whether  on  hand  or  with  other  banks,  and  the  invest- 
ments made,  shall  be  held  solely  for  the  repayment  of  the  de- 
positors and  other  claimants  of  each  such  department,  as 
herein  provided,  until  all  depositors  and  other  claimants  of 
each  such  department  shall  have  been  paid,  and  the  overplus 
then  remaining  shall  be  applied  to  any  other  liabilities  of  such 
bank. 

Sec.  28.  Every  bank  in  this  state  must,  on  all  its  window 
signs  and  in  advertising,  and  on  letterheads  and  other  station- 
ery on  which  its  business  is  transacted,  use  the  word  ' '  savings ' ' 
if  it  conducts  a  savings  business,  or  the  word  "trust"  if  it 
conducts  a  trust  business,  and  the  word  "commercial"  if  it 
conducts  a  commercial  business.  Every  bank,  which  main- 
tains a  branch  office,  must  on  all  window  signs  and  in  adver- 
tising, and  on  letterheads  and  other  stationery  on  which  the 
business  of  said  branch  office  is  transacted,  use  in  letters  and 
type,  equal  in  prominence  to  that  used  in  its  corporate  name, 
the  word  ' l  branch. ' ' 

Sec.  29.  Every  corporation  heretofore  created  under  the 
laws  of  this  state,  doing  a  banking  business  therein,  and  which 
has  no  capital  stock,  may  elect  to  have  a  capital  stock,  and  may 
issue  certificates  of  stock  therefor,  in  the  same  manner  as  cor- 
porations formed  under  the  provisions  of  part  IV,  title  I, 
chapter  I,  article  I,  of  the  Civil  Code,  relating  to  the  forma- 
tion of  corporations ;  provided,  that  no  such  corporation  shall 
use  or  convert  any  moneys  or  funds  theretofore  belonging  to  it, 
or  under  its  control,  into  capital  stock;  but  such  funds  or 
moneys  must  be  held  and  managed  only  for  the  purposes  and 
in  the  manner  for  which  they  were  created.  Before  such 
change  is  made,  a  majority  of  the  members  of  such  corporation 


CALIFORNIA   BANK   ACT  29 

present  at  a  meeting  called  for  the  purpose  of  considering  the 
proposition  whether  it  is  best  to  have  a  capital  stock,  its 
amount,  and  the  number  of  shares  into  which  it  shall  be 
divided,  must  vote  in  favor  of  having  a  capital  stock,  fix  the 
amount  thereof,  and  the  number  of  shares  into  which  it  shall 
be  divided.  Notice  of  the  time  and  place  of  holding  such 
meeting,  and  its  object,  must  be  given  by  the  president  of 
such  corporation  by  mailing  notice  of  such  meeting  to  each 
member  of  such  corporation  at  his  last  known  postoffice  ad- 
dress at  least  ten  days  prior  to  the  day  fixed  for  such  meeting, 
and  by  publication  in  some  newspaper  printed  and  published 
in  the  county,  or  city  and  county,  in  which  the  principal  place 
of  business  of  the  corporation  is  situated,  at  least  once  a  week 
for  three  successive  weeks  prior  to  the  holding  of  the  meeting. 
A  copy  of  the  proceedings  of  this  meeting,  giving  the  number 
of  persons  present,  the  votes  taken,  the  notice  calling  the  meet- 
ing, the  proof  of  its  publication,  the  amount  of  capital  actually 
subscribed,  and  by  whom,  all  duly  certified  by  the  president 
and  secretary  of  the  corporation,  must  be  filed  in  the  office  of 
the  secretary  of  state  and  clerk  of  the  county  where  the 
articles  of  incorporation  are  filed.  Thereafter  such  corporation 
is  possessed  of  all  the  rights  and  powers,  and  is  subject  to  all 
the  obligations,  restrictions,  and  limitations,  as  if  it  had  been 
originally  created  with  a  capital  stock. 

Sec.  30.  Any  bank  may  conduct  a  safe  deposit  department, 
but  shall  not  invest  more  than  one-tenth  of  its  capital  and 
surplus  in  such  safe  deposit  department. 

Sec.  31.  Any  bank  may  sell  the  whole  of  its  business  or 
the  whole  of  the  business  of  any  of  its  departments  to  any 
other  bank  which  may  purchase  such  business  after  obtaining 
the  consent  of  the  stockholders  of  the  selling  and  of  the  pur- 
chasing banks  holding  of  record  at  least  two-thirds  of  the 
issued  capital  stock  of  each  of  such  corporations ;  such  consent 
to  be  expressed  either  in  writing  executed  and  acknowledged 
by  such  stockholders  and  attached  to  the  instrument  of  sale, 
or  to  a  copy  thereof,  or  by  vote  at  a  stockholders'  meeting 
of  each  of  such  banks  called  for  that  purpose.     The  selling 


30  CALIFORNIA   BANK   ACT 

and  purchasing  banks  must  for  such  purposes  enter  into  an 
agreement  of  sale  and  purchase,  which  agreement  shall  con- 
tain  all  the  terms  and  conditions  connected  with  such  sale  and 
purchase.  Such  agreement  shall  contain  proper  provision  for 
the  payment  of  liabilities  of  the  selling  bank  or  of  the  depart- 
ment sold,  and  in  this  particular  shall  be  subject  to  the  ap- 
proval of  the  superintendent  of  banks ;  and  shall  not  be  valid 
until  such  approval  is  obtained.  Such  agreement  may  contain 
provisions- for  the  transfer  of  all  deposits  to  the  purchasing 
bank,  subject,  however,  to  the  right  of  every  depositor  of  the 
selling  bank  to  withdraw  his  deposit  in  full  on  demand  after 
such  transfer,  irrespective  of  the  terms  under  which  it  was  de- 
posited with  the  selling  bank.  The  rights  of  creditors  of  the 
selling  bank  shall  not  in  any  manner  be  impaired  by  any  such 
sale,  nor  shall  any  liability  or  obligation  for  the  payment  of 
any  money  due  or  to  become  due,  or  any  claim  or  demand,  in 
any  manner,  or  for  any  cause  existing  against  such  selling 
bank  or  against  any  stockholder  thereof,  be  in  any  manner 
released  or  impaired,  and  all  the  rights,  obligations  and 
relations  of  all  the  parties,  creditors,  depositors,  trustees 
and  beneficiaries  of  trusts  shall  remain  unimpaired  by  the 
sale,  but  such  bank  to  which  the  other  shall  sell  all  its  busi- 
ness or  all  the  business  of  any  of  its,  departments,  shall 
succeed  to  all  such  relations,  obligations,  trusts  and  liabili- 
ties and  be  held  liable  to  pay  and  discharge  all  such  debts 
and  liabilities  and  to  perform  all  such  trusts  of  the  selling 
bank  in  the  same  manner  as  if  such  bank  to  which  the  other 
had  sold  had  itself  incurred  the  obligation  or  liability  or 
assumed  the  relation  of  trust,  and  the  stockholders  of  the 
respective  corporations  so  entering  into  such  agreement 
shall  continue  subject  to  all  the  liabilities,  claims  and  de- 
mands existing  against  them  as  such  at  or  before  such  sale. 
Immediately  after  the  execution  of  such  agreement  of  sale 
and  purchase  notice  thereof  shall  be  published  for  at  least 
four  successive  weeks  in  a  newspaper  in  each  of  the  counties 
of  the  state  in  which  either  of  such  banks  shall  have  its 
principal  place  of  business ;  provided,  however,  that  no  action 
can  be  brought  against  such  selling  bank  or  any  of  its  stock- 


CALIFORNIA   BANK   ACT  31 

holders  on  account  of  any  deposits  so  transferred  after  the 
expiration  of  one  year  from  the  last  day  of  publication  herein 
required. 

An  affidavit  showing  such  publication  shall  be  filed  in  the 
office  of  the  superintendent  of  banks  within  ten  days  after 
the  last  publication  thereof.  The  affairs  of  such  selling  bank, 
or  selling  department  of  a  bank,  shall  remain  subject  to  the 
provisions  of  this  act. 

Sec.  31a.  Any  bank  incorporated  under  the  laws  of  this 
state  may  consolidate  with  one  or  more  banks  incorporated 
under  the  laws  of  this  state,  its  capital  stock,  properties,  trusts, 
claims,  demands,  contracts,  agreements,  obligations,  debts,  lia- 
bilities and  assets  of  every  kind  and  description,  upon  such 
terms  and  in  such  manner  as  may  be  agreed  upon  by  their 
respective  boards  of  directors,  a  copy  of  which  agreement 
must  be  filed  in  the  office  of  the  superintendent  of  banks; 
provided,  that  such  agreement  shall  be  subject  to  the  approval 
of  the  superintendent  of  banks  and  shall  not  be  valid  until 
such  approval  be  obtained;  provided,  further,  that  no  such 
consolidation  shall  take  effect  until  such  agreement  shall  have 
been  ratified  and  confirmed  in  writing  by  the  stockholders  of 
the  respective  banks  holding  of  record  at  least  two-thirds  of 
the  issued  capital  stock  of  their  respective  banks,  or  such 
agreement  may  be  submitted  to  the  stockholders  of  each  of 
such  corporations  at  a  meeting  thereof  to  be  called  upon  notice 
specifying  the  time,  place  and  object  thereof,  addressed  to 
each  stockholder  at  his  last  known  post  office  address  and  de- 
posited in  the  post  office,  postage  prepaid,  at  least  two  weeks 
prior  to  the  date  fixed  for  said  meeting,  and  published  for  at 
least  two  successive  weeks,  prior  to  the  date  of  said  meeting, 
in  a  newspaper  in  each  of  the  counties  of  the  state  in  which 
any  of  such  banks  shall  have  its  principal  place  of  business,  and 
if  such  agreement  shall  be  approved  at  each  of  such  meetings 
of  the  respective  stockholders  separately  by  the  vote  or  ballot 
of  the  stockholders  owning  at  least  two-thirds  of  the  stock  of 
each  such  bank,  the  same  shall  be  the  agreement  of  such  banks. 
In  case  of  such  consolidation  "articles  of  incorporation  and 
consolidation"  must  be  prepared,  setting  forth: 


32  CALIFORNIA  BANK   ACT 

First — The  name  of  the  new  corporation ; 

Second — The  purpose  for  which  it  was  formed; 

Third — The  place  where  its  principal  business  is  to  be 
transacted ; 

Fourth — The  term  for  which  it  is  to  exist,  which  shall  not 
exceed  fifty  years; 

Fifth — The  number  of. its  directors  (which  shall  not  be  less 
than  three)  and  the  names  and  residences  of  the  persons  ap- 
pointed to  act  as  such  until  their  successors  are  elected  and 
qualified ; 

Sixth — The  amount  of  its  capital  stock  and  the  number  of 
shares  into  which  it  is  divided ; 

Seventh — The  amount  of  stock  actually  subscribed,  and  by 
whom ; 

Eighth — The  names  of  the  constituent  corporations. 

Said  articles  of  incorporation  and  consolidation  must  be 
signed  and  countersigned  by  the  president  and  secretary  of 
each  constituent  corporation  and  sealed  with  their  corporate 
seals.  There  must  be  annexed  thereto  the  approval  of  the 
superintendent  of  banks  and  memoranda  of  the  ratification 
and  confirmation  thereof  by  the  stockholders  of  each  constitu- 
ent corporation,  which  must  be  respectively  signed  and  ac- 
knowledged by  stockholders  representing  at  least  two-thirds 
of  the  capital  stock  of  their  respective  corporations.  When 
completed  as  aforesaid  said  articles  must  be  filed  in  the  office 
of  the  county  clerk  of  the  county  in  which  is  located  the  prin- 
cipal place  of  business  of  the  new  corporation,  and  a  copy  of 
the  articles  of  incorporation  and  consolidation  certified  by  such 
county  clerk  must  be  filed  in  the  office  of  the  secretary  of  state, 
and  a  copy  of  the  articles  of  incorporation  and  consolidation 
certified  by  said  secretary  of  state  must  be  filed  in  the  office 
of  the  superintendent  of  banks,  and  also  in  the  office  of  the 
county  clerk  of  any  county  in  which  were  filed  the  original 
articles  of  incorporation  of  either  of  the  constituent  corpora- 
tions, and  thereupon  each  constituent  corporation  named 
therein  must  be  deemed  and  held  to  have  become  extinct  in 
all  courts  and  places,   and  said  new  corporation  must  be 


CALIFORNIA   BANK   ACT  33 

deemed  and  held  in  all  courts  and  places  to  have  succeeded 
to  all  their  several  capital  stocks,  properties,  trusts,  claims, 
demands,  contracts,  agreements,  assets,  choses  and  rights  in 
action  of  every  kind  and  description,  both  at  law  and  in  equity, 
and  to  be  entitled  to  possess,  enjoy,  and  enforce  the  same  and 
every  thereof,  as  fully  and  completely  as  either  and  every  of 
its  constituents  might  have  done  had  no  consolidation  taken 
place.  Said  consolidated  or  new  corporation  must  also,  in  all 
courts  and  places,  be  deemed  and  held  to  have  become  subro- 
gated to  its  several  constituents  and  each  thereof,  in  respect 
to  all  their  contracts  and  agreements  with  other  parties,  and 
all  their  debts,  obligations,  and  liabilities,  of  every  kind  and 
nature,  to  any  persons,  corporations,  or  bodies  politic,  whom- 
soever, or  whatsoever,  and  said  new  corporation  must  sue  and 
be  sued  in  its  own  name  in  any  and  every  case  in  which  any 
or  either  of  its  constituents  might  have  sued  or  might  have 
been  sued  at  law  or  in  equity  had  no  such  consolidation  been 
made.  Nothing  in  this  section  contained  shall  be  construed 
to  impair  the  obligation  of  any  contract  to  which  any  of  such 
constituents  were  parties  at  the  date  of  such  consolidation. 
All  such  contracts  may  be  enforced  by  action  or  suit,  as  the 
case  may  be,  against  the  consolidated  corporation,  and  satis- 
faction obtained  out  of  the  property  which,  at  the  date  of  the 
consolidation,  belonged  to  the  constituent  which  was  a  party 
to  the  contract  in  action  or  suit,  as  well  as  out  of  any  other 
property  belonging  to  the  consolidated  corporation,  and  the 
stockholders  of  each  constituent  corporation  so  entering  into 
such  agreement  shall  continue  subject  to  all  the  liabilities, 
claims  and  demands  existing  against  them  at  or  before  such 
consolidation  to  the  same  extent  as  if  the  same  had  not  been 
made.  The  right  of  said  new  corporation  to  increase  or  de- 
crease its  capital  stock,  to  change  the  number  of  its  directors, 
to  amend  its  articles  of  incorporation,  to  change  its  principal 
place  of  business,  or  its  name,  or  to  effect  any  other  organic 
change  shall  be  governed  by  the  general  corporation  laws  of 
this  state  and  by  the  bank  act,  and  the  procedure  to  effect  any 
such  change  shall  be  that  defined  by  the  general  corporation 
laws  and  the  bank  act. 


34  CALIFORNIA   BANK   ACT 

Sec.  32.  Any  bank  receiving  trust  funds  in  accordance  with 
the  provisions  of  this  act  relating  to  trust  companies  must  not 
mingle  such  trust  funds  with  the  other  assets  of  the  corpora- 
tion, except  as  otherwise  provided  in  section  twenty-five  of 
this  act,  and  such  funds  shall  not  be  carried  or  counted  as  any 
part  of  the  total  reserves  provided  for  in  this  act.  The  officers 
of  any  bank  who  knowingly  violate  or  consent  to  the  violation 
of  this  provision  shall  be  guilty  of  a  felony. 

(Sec.  33.    Repealed  1913.) 

Sec.  34.  No  bank  shall  purchase  or  invest  its  capital  or  sur- 
plus or  money  of  its  depositors,  or  any  part  of  either,  in  shares 
of  its  own  capital  stock ;  nor  loan  its  capital  or  surplus  or  the 
money  of  its  depositors,  or  any  part  of  either,  on  shares  of  its 
own  capital  stock,  unless  such  purchase  or  loan  shall  be  neces- 
sary to  prevent  loss  to  such  bank  on  debts  previously  con- 
tracted in  good  faith.  Every  person  or  corporation  violating 
any  provision  of  this  section  shall  forfeit  to  the  people  of  the 
state  twice  the  nominal  amount  of  such  stock. 

Sec.  35.  No  director,  or  officer,  or  employee,  or  controlling 
stockholder  of  any  bank  shall,  directly  or  indirectly,  for  his 
own  account,  for  himself,  or  as  the  partner  or  agent  of  others, 
sell  or  transfer,  or  cause  to  be  sold  or  transferred  to  the  bank 
of  which  he  is  a  director,  officer,  employee,  or  controlling 
stockholder,  any  note  or  bond  secured  by  any  mortgage  or 
trust  deed  on  real  estate  or  any  contract  arising  from  the  sale 
of  real  estate  in  which  such  director,  or  officer,  or  employee, 
or  controlling  stockholder  is  personally  or  financially  inter- 
ested, without  the  consent  in  writing  of  the  superintendent 
of  banks.  Any  director,  or  officer,  or  employee,  or  controlling 
stockholder  of  any  bank  who  knowingly  violates  or  consents  to 
the  violation  of  this  provision  shall  be  guilty  of  a  felony. 

Sec.  36.  No  commercial  bank  receiving  deposits  of  money 
shall  purchase  or  agree  to  purchase  any  bond  issue  in  excess  of 
five  per  centum  of  its  assets,  except  bonds  of  the  United  States, 
of  the  State  of  California,  of  the  counties,  cities  and  counties, 
cities  or  school  districts  of  this  state,  or  bonds  of  any  irrigation 
district  such  as  are  legal  for  investment  by  savings  banks. 


CALIFORNIA   BANK   ACT  35 

Sec.  37.  No  bank  shall  purchase  or  invest  its  capital  or  sur- 
plus or  money  of  its  depositors,  or  any  part  of  either,  in  the 
capital  stock  of  any  corporation  unless  the  purchase  or  acqui- 
sition of  such  capital  stock  shall  be  necessary  to  prevent  loss  to 
the  bank  on  an  obligation  owned  or  on  a  debt  previously  con- 
tracted in  good  faith.  Any  capital  stock  so  purchased  or 
acquired  shall  be  sold  by  such  bank  within  six  months  there- 
after if  it  can  be  sold  for  the  amount  of  the  claim  of  such  bank 
against  it;  and  all  capital  stock  thus  purchased  or  acquired 
must  be  sold  for  the  best  price  obtainable  by  said  bank  within 
one  year  after  such  purchase  or  acquisition.  Every  person  or 
corporation  violating  any  provision  of  this  section  shall  forfeit 
to  the  people  of  the  state  twice  the  nominal  amount  of  such 
stock. 

Sec.  38.  A  director,  officer,  agent  or  employee  of  any  bank 
who, 

First — Knowingly  receives  or  possesses  himself  of  any  of 
its  property  otherwise  than  in  payment  for  a  just  demand, 
and  with  intent  to  defraud,  omits  to  make  or  to  cause  or  direct 
to  be  made  a  full  and  true  entry  thereof  in  its  books  and 
accounts;  or, 

Second — Concurs  in  omitting  to  make  any  material  entry 
thereof;  or, 

Third — Knowingly  concurs  in  making  or  publishing  any 
written  report,  exhibit  or  statement  of  its  affairs  or  pecuniary 
condition  containing  any  material  statement  which  is  false ;  or, 

Fourth — Having  the  custody  or  control  of  its  books,  wil- 
fully refuses  or  neglects  to  make  any  proper  entry  in  the  books 
of  such  corporation  as  required  by  law,  or  to  exhibit  or  allow 
the  same  to  be  inspected  and  extracts  to  be  taken  therefrom 
by  the  superintendent  of  banks,  his  chief  deputy  or  any  of  his 
examiners,  shall  be  guilty  of  a  felony. 

Sec.  39.  Any  officer,  director,  agent,  teller,  clerk  or  em- 
ployee of  any  bank  who  either, 

First — Knowingly  overdraws  his  account  with  such  bank, 
and  thereby  obtains  the  money,  notes  or  funds  of  any  such 
bank ;  or, 


36  CALIFORNIA   BANK   ACT 

Second — Asks  or  receives  or  consents  or  agrees  to  receive 
any  commission,  emolument,  gratuity  or  reward,  or  any  money, 
property  or  thing  of  value,  for  his  own  personal  benefit,  or  of 
personal  advantage,  for  procuring  or  endeavoring  to  procure 
for  any  person,  firm  or  corporation  any  loan  from,  or  the  pur- 
chase or  discount  of  any  paper,  note,  draft,  check  or  bill  of 
exchange,  by  such  bank,  or  for  permitting  any  person,  firm  or 
corporation  to  overdraw  any  account  with  such  bank,  is  guilty 
of  a  felony. 

Sec.  40.  No  bank  mentioned  in  this  act  shall  make  any 
contract  with  any  of  its  depositors  whereby  the  stockholders' 
liability  provided  for  by  the  constitution  of  this  state  is  in 
any  manner  waived,  and  if  any  such  contract  shall  be  so  made, 
such  contract  shall  be  void. 

Sec.  41.  No  officer,  director,  agent,  or  other  employee  of 
any  bank  shall  directly  or  indirectly,  for  his  own  personal  ben- 
efit, purchase,  or  be  interested  in  the  purchase  of  any  obliga- 
tion of  said  bank  for  a  less  sum  than  shall  appear  upon  the 
face  of  such  obligation  to  be  the  value  thereof.  Every  person 
violating  any  provision  of  this  section,  shall  for  each  offense 
forfeit  to  the  people  of  the  state,  three  times  the  face  value  of 
any  such  obligation  so  purchased. 

Sec.  42.  No  officer,  director,  agent  or  other  employee  of 
any  bank,  shall  directly  or  indirectly,  for  his  own  personal  ben- 
efit, purchase,  or  be  interested  in  the  purchase  of  any  of  the 
assets  of  said  bank  "for  a  less  sum  than  the  current  market 
value  thereof.  Every  person  violating  any  provision  of  this 
section,  shall  for  each  offense,  forfeit  to  the  people  of  the  state, 
twice  the  nominal  amount  of  any  such  assets  so  purchased. 

Sec.  43.  No  bank  shall  deposit  any  of  its  funds  in  any 
other  bank  unless  such  other  bank  has  been  designated  as  a 
depositary  for  its  funds  by  the  vote  of  a  majority  of  the 
directors,  or  trustees  of  the  bank  making  the  deposit,  ex- 
clusive of  the  vote  of  any  director  who  is  an  officer,  director, 
or  trustee  of  the  depositary  so  designated;  provided,  how- 
ever, that  any  bank  may  designate  any  other  bank  its  de- 


CALIFORNIA   BANK  ACT  37 

positary  by  vote  of  a  majority  of  its  directors,  including 
the  vote  of  any  director  or  trustee  who  is  an  officer,  director  or 
trustee  of  the  depositary  so  designated,  if  such  bank  has  se- 
cured the  previous  approval  of  the  superintendent  of  banks, 
which  approval  he  may  at  any  time  revoke  for  proper  cause. 

Sec.  44.  No  bank  shall  hereafter  make  a  loan  secured 
by  the  stock  of  another  bank,  if  by  making  such  loan  the 
total  stock  of  such  other  bank  held  by  such  loaning  bank  as 
collateral  will  exceed  in  the  aggregate  twenty-five  per 
centum  of  the  capital  stock  of  such  other  bank;  provided, 
that  no  loan  upon  the  capital  stock  of  any  bank  shall  be 
made  unless  such  bank  has  been  in  existence  at  least  two 
years  and  has  earned  and  paid  a  dividend  upon  its  capital 
stock;  and  provided,  further,  that  no  bank  may  loan  more 
than  five  per  centum  of  its  assets  upon  the  capital  stock  of 
any  corporation  whatsoever  as  collateral  security. 

Sec.  45.  Interest  unpaid,  although  due  or  accrued,  on 
debts  owing  to  any  bank,  shall  not  be  included  in  calculation 
of  its  profits  previous  to  a  dividend. 

Sec.  46.  No  commercial  bank  shall  invest  or  loan  more 
than  five  per  centum  of  its  assets  in  any  one  bond  issue,  except 
bonds  of  the  United  States,  of  the  State  of  California,  of  the 
counties,  cities  and  counties,  cities  or  school  districts  of  this 
state,  or  bonds  of  any  irrigation  district  such  as  are  legal  for 
investment  by  savings  banks. 

Sec.  47.  No  commercial  bank  shall,  except  for  the  purpose 
of  facilitating  the  sale  of  property  owned  by  the  bank,  make 
any  loan  on  the  security  of  real  estate,  unless  it  is  a  first  lien 
and  is  either 

(1)  Made  for  a  period  of  time  not  exceeding  six  months 
and  upon  security  worth  at  least  fifteen  per  centum  more  than 
the  amount  loaned ;  or 

(2)  Made  for  a  period  of  time  exceeding  six  months  and 
not  exceeding  ten  years  and  does  not  exceed  sixty  per  centum 
of  the  market  value  of  the  real  estate  taken  as  security. 


38  CALIFORNIA   BANK   ACT 

No  commercial  bank  shall  loan  in  the  aggregate  more  than 
thirty-five  per  centum  of  its  assets  on  real  estate  loans  of  the 
character  specified  in  subdivision  two  of  this  section.  These 
provisions,  however,  shall  not  prevent  any  bank  from  taking 
another  and  immediately  subsequent  mortgage  or  deed  of  trust 
thereon  when  it  already  holds  a  first  mortgage  or  deed  of 
trust  on  such  real  estate,  nor  from  accepting  a  second  lien 
on  real  estate  to  secure  the  re-payment  of  a  debt  previously 
contracted  in  good  faith ;  nor  shall  it  prevent  subsequent  liens 
of  any  kind  from  being  taken  to  secure  the  payment  of  a  debt 
previously  contracted  in  good  faith  when,  in  the  judgment  of 
the  directors  of  such  bank,  such  subsequent  liens  are  neces- 
sary further  to  secure  the  payment  of  any  debts  and  save 
such  bank  from  loss. 

Sec.  48.  Any  national  bank,  in  this  state,  other  than 
a  federal  reserve  bank,  receiving  the  deposits  of  any  bank 
organized  and  conducting  business  under  this  act,  must,  at 
the  request  of  the  superintendent  of  banks,  submit  to  an 
examination  by  him,  or  his  duly  appointed  examiners,  should 
the  superintendent  of  banks  in  his  discretion  deem  it  necessary 
or  desirable  that  such  examination  be  made ;  and  the  expense 
of  such  examination  shall  be  paid  by  such  depositary  bank ; 
and  if  any  such  bank  shall  refuse  to  permit  such  examination 
to  be  made  by,  or  under  the  direction  of,  the  superintendent 
of  banks,  then  the  superintendent  of  banks  shall  notify  in 
writing  every  bank  depositing  its  funds  with  such  bank,  to 
withdraw  its  deposits  therefrom,  and  all  such  banks  shall 
comply  with  such  order. 

Sec.  49.  It  shall  not  be  lawful  for  any  commercial  bank, 
individual,  trust  company,  association,  firm,  stock  company, 
co-partnership  or  corporation,  to  advertise  or  put  forth  a  sign 
as  a  savings  bank,  or  either  directly  or  indirectly  or  in  any 
way  to  solicit  or  receive  deposits  or  to  transact  business  in  the 
way  or  manner  of  a  savings  bank,  or  to  advertise  that  he  or 
it  is  receiving  or  accepting  savings,  or  in  any  way  which 
might  lead  the  public  to  believe  that  such  deposits  are  received 
or  invested  under  the  same  conditions  or  in  the  same  manner 
as  deposits  in  savings  banks,  except  in  the  case  of  savings 


CALIFORNIA   BANK   ACT  39 

banks  or  banks  having  savings  departments,  subject  to  the 
provisions  of  this  act.  Any  commercial  bank,  individual,  trust 
company,  association,  firm,  stock  company,  co-partnership  or 
corporation,  violating  any  provision  of  this  section  shall  for- 
feit to  this  state  one  hundred  dollars  a  day  for  every  day 
during  which  such  violation  continues. 

Sec.  50.  Every  bank  shall  post  in  a  conspicuous  place 
in  its  banking  room  or  branch  office  the  last  certificate  ob- 
tained from  the  superintendent  of  banks  under  the  provisions 
of  either  section  nine  or  one  hundred  twenty-seven  of  this 
act. 

Sec.  51.  Any  court  having  appointed  and  having  juris- 
diction of  any  executor,  administrator,  guardian,  assignee, 
receiver,  depositary  or  trustee,  upon  the  application  of  such 
executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
tary or  trustee,  or  upon  the  application  of  any  person  having 
an  interest  in  the  estate  administered  upon  by  such  officer  or 
trustee,  after  notice  to  other  parties  in  interest  as  the  court 
may  direct,  and  after  a  hearing  upon  such  application,  may 
authorize  such  officer  or  trustee  to  deposit  any  money  then  in 
his  hands  as  such  officer  or  trustee  or  which  may  thereafter 
come  into  his  hands,  and  until  the  further  order  of  the  court,  in 
any  bank  organized  under  the  laws  of  the  State  of  California ; 
and  upon  such  deposit  being  made,  the  officer  or  trustee  so 
depositing  the  same  shall  thereafter  and  while  such  moneys 
remain  on  deposit  in  such  bank,  be  relieved  and  discharged 
from  all  liability  and  responsibility  therefor,  and  the  bond 
required  of  such  officer  or  trustee  given  upon  his  appointment 
shall  be  thereupon  by  said  court  reduced  to  such  an  amount 
as  the  court  may  deem  reasonable ;  such  deposit  shall  be  repaid 
only  upon  the  orders  of  said  court,  and  shall  be  a  preferred 
claim  against  such  bank  and  be  paid  in  full  before  any  other 
depositor  of  such  bank  shall  have  been  paid. 

Sec.  52.  Whenever  a  check  drawn  on  any  bank  is  certified 
by  any  officer  or  employee  of  such  bank,  the  amount  thereof 
shall  be  immediately  charged  against  the  account  of  the  per- 
son, firm  or  corporation  drawing  the  same. 


40  CALIFORNIA  BANK  ACT 

It  shall  be  unlawful  for  any  officer  or  employee  of  any  bank 
to  certify  any  check  drawn  upon  such  bank  unless  the  person, 
firm  or  corporation  drawing  the  check  has  on  deposit  with  the 
bank  at  the  time  such  check  is  certified,  an  amount  of  money 
subject  to  the  payment  of  such  check,  equal  to  the  amount 
specified  in  such  check. 

Any  officer  or  employee  of  any  bank  who  shall  wilfully 
violate  the  provisions  of  this  section,  or  shall  resort  to  any 
device,  or  receive  any  fictitious  obligations,  directly  or  indi- 
rectly, in  order  to  evade  the  provisions  hereof,  or  who  shall 
certify  checks  before  the  amount  thereof  shall  have  been  regu- 
larly entered  to  the  credit  of  the  drawer,  shall  be  guilty  of  a 
felony. 

Sec.  53.  The  capital  stock  of  any  bank  having  a  capital 
stock  shall  have  a  par  value  of  one  hundred  dollars  per  share, 
and  the  paid-up  value  shall  be  endorsed  upon  the  face  of  each 
certificate  issued,  which  paid-up  value  shall  be  the  same  on  all 
certificates  issued.  No  bank  shall  have  preferred  stock;  pro- 
vided, however,  that  no  bank  whose  capital  stock,  on  January 
1,  1915,  failed  to  comply  with  any  of  the  requirements  of  this 
section,  shall  be  compelled  to  change  its  capital  stock  in  com- 
pliance herewith. 

Sec.  54.  All  real  estate  purchased  by  any  bank  at  sales 
under  pledges,  mortgages  or  deeds  of  trust  for  its  benefit 
for  money  loaned  and  such  as  may  be  conveyed  to  it  by 
borrowers  in  satisfaction  and  discharge  of  loans  made  thereon 
and  all  other  real  estate  owned  or  held  by  it,  which  is  not 
necessary  for  carrying  on  its  business,  must  be  sold  by  such 
bank  within  five  years  after  title  thereto  shall  have  vested 
in  it  by  purchase  or  otherwise.  Parcels  of  such  real  estate 
not  sold  within  said  time  may  be  purchased  by  any  person 
wanting  the  same  upon  the  conditions  and  proceedings  follow- 
ing: The  intending  purchaser  may  file  a  petition  in  the  su- 
perior court  in  and  for  the  county  wherein  said  real  estate  or 
any  portion  thereof  is  situated ;  upon  the  filing  of  such  petition 
a  citation  shall  be  issued  out  of  said  court  directed  to  the  bank 
owning  such  real  estate  requiring  such  bank  to  show  cause  on 
a  day  certain  which  shall  be  not  earlier  than  ten  days  after  the 


CALIFORNIA  BANK   ACT  41 

service  of  such  citation,  why  commissioners  should  not  be  ap- 
pointed by  said  court  for  the  purpose  of  appraising  the  value 
of  the  real  estate  described  in  the  petition  and  of  selling  the 
same  at  public  auction  under  the  provisions  of  this  section.  If 
there  shall  be  any  liens  or  encumbrances  of  record  against  such 
real  estate  the  person  or  persons  holding  such  liens  or  encum- 
brances shall  likewise  be  cited  and  the  court  shall  in  its  final 
decree  distribute  the  proceeds  of  such  sale,  if  a  sale  thereof 
shall  be  made,  according  to  the  equities  of  the  parties.  If  it 
shall  appear  at  the  hearing  of  such  petition  that  the  real  estate 
therein  sought  to  be  purchased  is  held  by  such  bank  in  violation 
of  the  provisions  of  this  section  or  of  the  constitution  of  this 
state,  the  court  shall  appoint  three  commissioners  to  appraise 
the  value  thereof  and  sell  the  same  at  public  auction  at  the 
county  seat  of  the  county  wherein  said  real  estate  or  any  part 
thereof  is  located.  Notice  of  which  said  sale  shall  be  given  to 
the  bank  owning  said  real  estate  and  to  any  other  persons  in- 
terested therein  as  shown  by  the  records  of  such  county  at  least 
ten  days  before  the  date  of  such  sale  and  shall  be  published 
once  a  week  for  three  successive  weeks  in  some  newspaper 
published  in  the  county  where  such  real  estate  or  any  part 
thereof  may  be  located,  or  if  no  newspaper  shall  be  published 
in  such  county,  then  in  a  newspaper  published  in  some  neigh- 
boring county.  Such  notice  shall  state  the  time  and  place  of 
such  sale  and  shall  describe  the  real  estate  to  be  sold  with  com- 
mon certainty  and  state  the  value  thereof  as  fixed  by  the  ap- 
praisement of  such  commissioners  and  state  that  no  bid  less 
than  such  appraised  value  will  be  received  therefor.  No  sale 
shall  be  made  for  an  amount  less  than  the  appraised  value  of 
such  real  estate  fixed  by  said  commissioners,  and  in  the  event 
that  no  bid  is  received  at  such  sale  at  least  equal  to  said  ap- 
praised value  of  said  real  estate  no  intending  purchaser  can  in- 
stitute the  proceedings  provided  for  in  this  section  within  one 
year  thereafter.  In  case  of  any  sale  made  under  the  provisions 
of  this  section  and  of  the  refusal  of  any  bank  owning  such  real 
estate  or  of  any  lienholder  or  encumbrancer  to  execute  the 
conveyances  or  releases  necessary  or  proper  to  vest  the  title  of 
such  bank,  lienholder  or  encumbrancer  in  the  purchaser  thereof 


42  CALIFORNIA   BANK   ACT 

the  court  shall  have  power  in  such  proceedings  to  direct  said 
commissioners  to  execute  such  deeds,  conveyances  or  releases 
upon  the  payment  to  them  of  the  purchase  price  therefor.  The 
fees  of  such  commissioners  and  cost  of  sale  shall  be  fixed  by 
the  court,  upon  making  such  appointment,  but  the  entire  ex- 
pense thereof  shall  not  exceed  one  hundred  dollars.  The 
cost  of  any  such  proceedings  shall  be  borne  by  the  intending 
purchaser  if  no  sale  shall  be  made,  but  if  a  sale  shall  be  made 
the  costs  of  such  proceedings  shall  be  borne  by  the  purchaser 
of  the  property  and  the  person  who  filed  the  petition  and  ad- 
vanced the  costs  of  such  proceedings  shall  be  reimbursed  in 
case  he  shall  not  become  such  purchaser.  All  sales  hereunder 
shall  be  returned  to  the  court  having  jurisdiction  of  the  matter 
in  the  same  manner  as  in  the  case  of  sales,  by  commissioners, 
of  real  estate  on  foreclosure  of  mortgages.  Nothing  in  this 
section  contained  shall  be  deemed  to  affect  the  power  of  the 
superintendent  of  banks  to  require  the  writing  down  of  the 
value  of  real  estate  held  by  any  bank,  at  any  time,  when  such 
writing  down  shall  be  proper. 

Sec.  55.  Receiving  deposits,  issuing  certificates  of  de- 
posit, checks  and  bills  of  exchange,  and  the  like,  in  the  trans- 
action of  the  ordinary  business  of  a  bank,  must  not  be  con- 
strued to  be  the  creation  of  debt  within  the  meaning  of  the 
phrase  "create  debt"  in  section  three  hundred  nine  of  the 
Civil  Code,  nor  of  indebtedness  within  the  meaning  of  the 
phrase  ' '  the  capital  stock  can  not  be  diminished  to  an  amount 
less  than  the  indebtedness  of  the  corporation"  in  section 
three  hundred  fifty-nine  of  the  Civil  Code,  except  that  no 
bank  shall  reduce  its  capital  stock  to  an  amount  less  than 
is  required  by  this  act  to  be  maintained-  by  such  bank,  or  less 
than  any  indebtedness  of  such  bank  other  than  such  deposits. 

The  terms  "real  estate,"  or  "real  property,"  or  "personal 
property,"  when  used  in  this  act  shall  have  the  meaning 
defined  in,  and  shall  be  construed  in  accordance  with  the 
provisions  of  title  I  of  part  I  of  division  second  of  the  Civil 
Code. 

Sec.  56.  Any  bank  organized  and  existing  under  the  laws 
of  this  state  is  hereby  authorized  and  empowered  to  join  or 


CALIFORNIA   BANK   ACT  43 

associate  itself  with  any  "national  reserve  association  of  the 
United  States"  or  branch  thereof,  or  any  plan  now  or  here- 
after created  or  established  by  act  of  congress  whether  such 
banking  or  currency  association  or  plan  be  created  by  congress 
under  the  above  or  any  other  name.  Nothing  in  this  act 
shall  prohibit  any  such  bank  from  joining  or  associating  itself 
with  any  such  association  or  plan  or  branch  thereof  nor  from 
investing  any  part  of  its  capital  or  surplus  in  the  stock  of 
such  association,  plan  or  branch  thereof  in  accordance  with 
the  terms  and  provisions  of  such  act  of  congress;  provided, 
however,  that  such  investment  shall  in  no  case  exceed  the  mini- 
mum amount  required  to  join  or  associate  itself  with  such 
association,  plan  or  branch  thereof.  Any  bank  joining  or  asso- 
ciating itself  with  such  association,  plan  or  branch  thereof, 
shall  have  and  exercise  all  powers,  not  in  conflict  with  the 
laws  of  this  state,  which  are  conferred  upon  any  member  bank 
in  any  such  "national  reserve  association  of  the  United  States" 
or  branch  thereof.  Such  member  bank  and  its  directors, 
officers  and  stockholders  shall  continue  to  be  subject,  however, 
to  all  liabilities  and  duties  imposed  upon  them  by  any  law  of 
this  state  and  to  all  the  provisions  of  the  "bank  act." 

Sec.  57.  Whenever  in  this  act  it  is  required  that  loans  or 
investments  shall  be  secured  by  a  first  lien  on  real  estate,  the 
lien  of  any  tax,  assessment  or  bond  levied  or  issued  by  this 
state  or  by  any  county,  city  and  county,  city,  town,  munici- 
pality, school  district,  reclamation  district,  irrigation  district 
or  any  other  political  or  governmental  subdivision  of  this  state 
(not  including  bonds  given  pursuant  to  any  law  authorizing 
the  same  by  any  person  or  corporation  in  lieu  of  payment  of 
any  tax  or  assessment  levied  against  any  particular  real  prop- 
erty) and  the  lien  of  any  assessment  levied  to  pay  such  bonds 
shall  not  be  deemed  to  be  a  prior  encumbrance  or  lien  on  such 
real  property  unless  an  installment  or  call  of  such  tax,  assess- 
ment or  bond  shall  be  due  and  delinquent;  and  any  bonds 
given  pursuant  to  any  law  authorizing  the  same  by  any  person 
or  corporation  in  lieu  of  payment  of  any  tax  or  assessment 
levied  against  any  particular  real  property  and  any  lien  given 
to  secure  the  payment  of  assessments  or  subscriptions  to  meet 


44  CALIFORNIA  BANK   ACT 

the  requirements  of  any  law  of  the  United  States  in  respect  to 
any  irrigation  project  of  the  United  States  in  this  state  which 
may  be  levied,  made  or  received  by  any  corporation  or  associa- 
tion formed  to  carry  ont  the  objects  and  requirements  of  any 
such  law  of  the  United  States  shall  not  be  deemed  to  be  a  prior 
encumbrance  or  lien  on  such  real  property  if  the  lien  given  to 
secure  such  assessments  and  subscriptions  taken  with  the  loan 
or  investment  so  secured  shall  amount  to  not  more  than  sixty 
per  centum  of  the  market  value  of  the  land  securing  the  same. 


ARTICLE  II. 

SAVINGS  BANKS. 

Sec.  60.  Every  savings  bank  hereafter  organized  must  have 
paid  up  in  cash  a  capital  stock  of  not  less  than 

(a)  Twenty-five  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  locality  the  population  of  which  does 
not  exceed  five  thousand  persons ; 

(b)  Fifty  thousand  dollars  if  its  principal  place  of  business 
is  located  in  any  city  the  population  of  which  is  more  than  five 
thousand  persons,  but  does  not  exceed  twenty-five  thousand 
persons ; 

(c)  One  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more 
than  twenty-five  thousand  persons  but  does  not  exceed  one  hun- 
dred thousand  persons ; 

(d)  Two  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more 
than  one  hundred  thousand  persons  but  does  not  exceed  two 
hundred  thousand  persons ; 

(e)  Three  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more 
than  two  hundred  thousand  persons. 

Excepting  that  any  savings  bank  organized  without  capital 
stock  must  have  a  reserve  fund  of  at  least  one  million  dollars. 


CALIFORNIA  BANK   ACT  45 

Until  the  capital  stock  or  reserve  fund  hereinbefore  re- 
quired shall  be  actually  paid  in,  the  superintendent  of  banks 
shall  refuse  to  issue  the  certificate  required  by  this  act.  The 
foregoing  classification  shall  not  apply  to  any  savings  bank 
already  in  existence  which  has  received  its  certificate  to  do  a 
banking  business  from  the  superintendent  of  banks;  nor  to 
any  bank  the  location  of  which  shall  have  been  included  by 
annexation  or  consolidation  within  the  limits  of  a  city  of  a 
class  requiring  a  larger  capitalization,  but  no  bank  thus  ex- 
cepted shall  be  permitted  to  establish  any  new  branch  office 
as  provided  in  section  nine  of  this  act  or  to  remove  its  place 
of  business  from  the  original  limits  of  the  city  or  township 
wherein  it  was  located  prior  to  such  annexation  or  consolida- 
tion until  it  shall  have  the  capital  required  of  banks  in  such 
city  not  within  said  exception.  Such  excepted  banks  may  not 
in  any  case  decrease  their  capital  stock  but  may  increase  the 
same  in  the  manner  provided  by  law  to  an  amount  either 
greater  or  less  than  that  required  of  banks  in  such  city  not 
within  said  exception ;  provided,  that  nothing  herein  shall  be 
construed  to  affect  the  provisions  of  section  nineteen  of  this 
act  relative  to  the  proportion  of  capital  and  surplus  to  deposits 
or  of  section  twenty-three  of  this  act  relative  to  the  capital 
stock  required  of  banks  doing  a  departmental  business.  The 
provisions  of  section  twenty-three  of  this  act,  as  to  population, 
shall  apply  to  any  bank  organized  under  the  provisions  of  this 
section. 

Sec.  61.  Any  savings  bank  may  purchase,  hold  and  convey 
real  or  personal  property  as  follows : 

1.  The  lot  and  building  in  which  the  business  of  the  bank  is 
carried  on;  furniture  and  fixtures,  vaults  and  safe  deposit 
vaults  and  boxes  necessary  or  proper  to  carry  on  its  banking 
business ;  such  lot  and  building,  furniture  and  fixtures,  vaults 
and  safe  deposit  vaults  and  boxes  shall  not,  in  the  aggregate, 
be  carried  on  the  books  of  such  bank  as  an  asset  to  an  amount 
exceeding  its  paid  up  capital  and  surplus ;  and  hereafter,  the 
authority  of  a  two-thirds  vote  of  all  of  the  directors  shall  be 
necessary  to  authorize  the  purchase  of  such  lot  and  building, 
or  the  construction  of  such  building. 


46  CALIFORNIA   BANK   ACT 

2.  Such  as  may  have  been  mortgaged,  pledged  or  conveyed 
to  it  in  trust  for  its  benefit  in  good  faith,  for  money  loaned  in 
pursuance  of  the  regular  business  of  the  corporation. 

3.  Such  as  may  have  been  purchased  at  any  sales  under 
pledge,  mortgage  or  deed  of  trust  made  for  its  benefit  for 
money  so  loaned  and  such  as  may  be  conveyed  to  it  by  bor- 
rowers in  satisfaction  and  discharge  of  loans  made  thereon. 

No  savings  bank  shall  purchase,  own,  or  sell  personal  prop- 
erty, except  such  as  may  be  requisite  for  its  immediate  accom- 
modation for  the  convenient  transaction  of  its  business,  notes 
or  bonds  secured  by  trust  deeds  or  mortgages  on  real  estate, 
bonds,  securities  or  evidences  of  indebtedness,  public  or  pri- 
vate, gold  or  silver  bullion  and  United  States  mint  certificates 
of  ascertained  value,  and  evidences  of  debt  issued  by  the  United 
States.  No  savings  bank  shall  purchase,  own,  hold  or  convey 
bonds,  securities  or  evidences  of  indebtedness,  public  or  pri- 
vate, except  as  follows : 

(a)  Bonds  or  interest  bearing  notes  or  obligations  of  the 
United  States,  or  those  for  which  the  faith  and  credit  of  the 
United  States  are  pledged  for  the  payment  of  principal  and 
interest ; 

(b)  Bonds  of  this  state,  or  those  for  which  the  faith  and 
credit  of  the  State  of  California  are  pledged  for  the  payment 
of  principal  and  interest ; 

(c)  Bonds  of  any  state  in  the  United  States  that  has  not, 
within  five  years  previous  to  making  such  investment  by  such 
bank,  defaulted  in  the  payment  of  any  part  of  either  princi- 
pal or  interest; 

(d)  Bonds  of  any  county,  city  and  county,  city  or  school 
district  of  this  state ;  bonds  of  any  permanent  road  division  in 
any  county  issued  in  pursuance  of  the  provisions  of  article  IX 
of  chapter  II,  title  VI,  part  III  of  the  Political  Code ;  bonds 
of  any  sewer  district,  drainage  district,  reclamation  district, 
protection- district,  or  sanitary  district  organized  under  the 
laws  of  this  state ;  and  any  irrigation  district  bonds  which  the 
law  may  now  or  hereafter  authorize  to  be  used  as  security  for 
the  deposit  of  public  moneys ;  provided,  that  the  total  amount 
of  bonds  so  issued  by  any  such  sewer  district,  drainage  district, 


CALIFORNIA   BANK   ACT  47 

protection  district  or  sanitary  district,  does  not  exceed  fifteen 
per  centum  of  the  value  of  the  taxable  property  in  said  district 
as  shown  by  the  last  equalized  assessment  roll  of  the  county  in 
which  said  district  is  located ;  and  provided,  further,  that  the 
total  amount  of  bonds  issued  by  any  such  irrigation  district 
does  not  exceed  sixty  per  centum  of  the  aggregate  market 
value  of  the  lands  within  such  district,  and  of  the  water,  water 
rights,  canals,  reservoirs,  reservoir  sites  and  irrigation  works 
owned  or  to  be  acquired  or  constructed  with  the  proceeds  of 
any  of  such  bonds,  by  said  district,  such  facts  in  reference  to 
bonds  of  irrigation  districts  to  be  determined  by  a  commission 
now  or  hereafter  authorized  by  law  to  ascertain  and  report 
upon  such  facts. 

(e)  Bonds  of  any  county,  city  and  county,  city  or  town,  in 
any  state  of  the  United  States  other  than  the  State  of  Cali- 
fornia, issued  under  authority  of  any  law  of  such  state,  which 
county,  city  and  county,  city  or  town,  had,  as  shown  by  the 
federal  or  state  census  next  preceding  such  investment,  a  popu- 
lation of  more  than  twenty  thousand  inhabitants;  provided, 
however,  that  the  entire  bonded  indebtedness  of  such  county, 
city  and  county,  city  or  town,  including  such  issue  of  bonds 
does  not  exceed  fifteen  per  centum  of  the  value  of  the  taxable 
property  therein  as  shown  by  its  last  equalized  assessment 
roll ;  and  provided,  further,  that  such  county,  city  and  county, 
city  or  town,  or  the  state  in  which  it  is  located  has  not  de- 
faulted in  payment  of  either  principal  or  interest  due  upon 
any  legally  authorized  bond  issue  within  five  years  next  pre- 
ceding such  investment. 

(f )  (1)  Bonds  of  any  railroad  corporation  incorporated 
under  the  laws  of  the  State  of  California  and  operating  exclu- 
sively therein,  provided  said  corporation  has  had  net  earnings 
for  the  period  herein  fixed  amounting  to  at  least  one  and  one- 
fourth  times  the  interest  on  all  its  outstanding  mortgage  in- 
debtedness;  or 

(2)  Bonds  of  any  railroad  corporation  incorporated  under 
the  laws  of  any  other  state  in  the  United  States,  operating  at 
least  five  hundred  miles  of  standard  gauge  track  exclusive  of 
sidings,  provided  said  corporation  has  had  net  earnings  for 


48  CALIFORNIA   BANK   ACT 

the  period  herein  fixed  amounting  to  at  least  one  and  one-half 
times  the  interest  on  all  its  outstanding  mortgage  indebted- 
ness; or 

(3)  Bonds  of  any  railroad  corporation,  the  payment  of 
which  has  been  guaranteed,  both  as  to  principal  and  interest, 
by  a  railroad  corporation  meeting  the  requirements  of  either 
subdivision  (1)  or  (2)  of  paragraph  (f)  of  this  section,  pro- 
vided that  such  guaranteeing  corporation  has  had  for  the 
period  herein  fixed  net  earnings  amounting  to  at  least  one  and 
one-half  times  the  interest  on  all  its  outstanding  mortgage  in- 
debtedness and,  in  addition  thereto,  sufficient,  taken  with  the 
earnings  of  all  corporations  whose  bonds  it  has  guaranteed,  to 
qualify  as  investments  for  savings  banks,  as  in  this  section  pro- 
vided, all  such  guaranteed  bonds;  provided,  that  the  excess 
of  income  of  any  corporation  whose  bonds  have  been  so  guar- 
anteed, over  the  amount  required  by  this  section  for  such  cor- 
poration, shall  not  apply  to  or  be  included  in  determining  the 
income  so  required.  In  determining  the  income  of  any  corpora- 
tion specified  in  paragraph  (f)  of  subdivision  3  of  this  section, 
there  shall  be  included  the  income  of  any  corporation  or  cor- 
porations out  of  which  it  shall  have  been  formed  through  con- 
solidation or  merger,  and  of  any  corporation  or  corporations, 
the  entire  business  and  income  producing  property  of  which 
the  corporation  issuing  such  bonds  has  wholly  acquired. 

All  bonds  authorized  for  investment  by  paragraph  (f)  of 
subdivision  3  of  this  section  must  be  secured  by  a  mortgage  or 
deed  of  trust  which  is,  at  the  time  of  making  such  investment, 
either 

I.  A  closed  first  mortgage  or  deed  of  trust ;  or 

II.  A  first  mortgage  or  deed  of  trust  containing  provisions 
restricting  the  issuance  of  further  bonds  until  such  time  as  the 
income  of  said  corporation  shall  have  been  at  least  sufficient, 
during  the  twelve  months  next  preceding  the  issuance  of  any 
additional  bonds,  to  meet  the  earning  requirements  specified 
in  the  respective  subdivisions  of  this  paragraph  applicable  to 
such  corporation  after  including  the  additional  bonds  then 
proposed  to  be  issued ;  or 


CALIFORNIA   BANK   ACT  49 

III.  A  refunding  mortgage  or  deed  of  trust  providing  for 
the  retirement  of  all  prior  lien  mortgage  debts  of  said  corpora- 
tion, and  restricting  the  issuance  of  further  bonds  until  such 
time  as  the  income  of  said  corporation  shall  have  been  at  least 
sufficient,  during  the  twelve  months  next  preceding  the  issu- 
ance of  any  additional  bonds,  to  meet  the  earning  requirements 
specified  in  the  respective  subdivisions  of  this  paragraph  appli- 
cable to  such  corporation  after  including  the  additional  bonds 
then  proposed  to  be  issued ;   or 

IV.  An  underlying  or  divisional  closed  mortgage  or  deed  of 
trust  of  property  which  forms  a  part  of  the  operating  system 
of  the  corporation  then  owning  said  property.  In  the  case  of 
bonds  secured  by  an  underlying  or  divisional  closed  mortgage 
or  deed  of  trust,  the  net  income  required  by  this  section  shall 
be  based  exclusively  upon  the  income,  maintenance  charges, 
operating  expenses,  taxes,  and  mortgage  indebtedness  of  or 
against  the  property  covered  by  such  underlying  or  divisional 
closed  mortgage  or  deed  of  trust,  or,  if  such  income,  mainte- 
nance charges  or  operating  expenses  can  not  be  definitely  as- 
certained, on  the  proper  proportionate  share  of  such  property 
in  the  general  income,  maintenance  charges,  operating  ex- 
penses, and  taxes  of  the  corporation  then  owning  such  prop- 
erty and  on  the  mortgage  indebtedness  of  or  against  the 
property  covered  by  such  underlying  or  divisional  closed  mort- 
gage or  deed  of  trust ;  provided,  however,  that  if  the  payment 
of  the  bonds  secured  by  such  underlying  or  divisional  closed 
mortgage  or  deed  of  trust  shall  be  guaranteed  or  assumed  by 
the  corporation  then  owning  the  property  securing  the  same, 
such  bonds  shall  be  legal  investments  for  savings  banks,  if  the 
net  income  of  such  corporation  from  all  sources  shall  equal  the 
amount  herein  required,  notwithstanding  any  insufficiency  of 
the  income  derived  from  the  property  covered  by  such  under- 
lying or  divisional  closed  mortgage  or  deed  of  trust  to  meet 
the  requirements  of  this  section. 

No  savings  bank  shall  purchase  the  bonds  of  any  railroad 
corporation  deriving  less  than  twenty  per  centum  of  its  gross 
receipts  from  passenger  revenues. 


50  CALIFORNIA   BANK   ACT 

The  term  "railroad  corporation"  when  used  in  para- 
graph (f)  of  subdivision  3  of  this  section  shall  have  the 
meaning  denned  in  the  "Public  Utilities  Act"  approved 
December  23,  1911. 

(g)  Bonds  of  any  street  railroad  corporation;  or  of  any 
gas ;  water ;  pipe  line ;  light ;  power ;  light  and  power ;  gas, 
light  and  power;  electrical;  telephone;  telegraph;  or  tele- 
phone and  telegraph  corporation  or  of  any  other  "public 
utility"  incorporated  under  the  laws  of  the  State  of  Cali- 
fornia; and 

(1)  Operating  exclusively  in  the  State  of  California,  pro- 
vided said  corporation  has  had,  for  the  period  herein  fixed, 
net  earnings  amounting  to  one  and  one-half  times  the  interest 
on  all  its  outstanding  mortgage  indebtedness ;   or 

(2)  Operating  its  property  in  part  within  the  State  of  Cali- 
fornia, provided  said  corporation  has  had,  for  each  of  its  two 
fiscal  years  next  preceding  such  investment,  net  earnings 
amounting  to  one  and  one-half  times  the  interest  on  all  its 
outstanding  mortgage  indebtedness ;   or 

(3)  The  payment  of  which  is  guaranteed,  both  as  to  prin- 
cipal and  interest,  by  a  public  utility  corporation  meeting  the 
requirements  of  either  subdivision  (1)  or  (2)  of  paragraph 
(g)  of  this  section,  provided  that  such  guaranteeing  corpora- 
tion has  had  for  the  period  required  in  the  respective  subdi- 
visions of  this  paragraph  relating  thereto,  net  earnings 
amounting  to  at  least  one  and  one-half  times  the  interest  on 
all  of  said  guaranteeing  corporation's  outstanding  mortgage 
indebtedness,  and,  in  addition  thereto,  sufficient,  taken  with 
the  earnings  of  all  corporations  whose  bonds  it  has  guaranteed, 
to  qualify  as  investments  for  savings  banks,  as  in  this  section 
provided,  all  such  guaranteed  bonds ;  provided,  that  the  excess 
of  income  of  any  corporation  whose  bonds  have  been  so  guar- 
anteed, over  the  amount  required  by  this  section  for  such  cor- 
poration, shall  not  apply  to  or  be  included  in  determining  the 
income  so  required. 

In  determining  the  income  of  any  corporation  specified  in 
paragraph  (g)  of  subdivision  3  of  this  section,  there  shall  be 
included  the  income  of  any  corporation  or  corporations  out  of 


CALIFORNIA   BANK   ACT  51 

which  it  shall  have  been  formed  through  consolidation  or 
merger,  and  of  any  corporation  the  entire  business  and  income 
producing  property  of  which  the  corporation  issuing  such 
bonds  has  wholly  acquired. 

All  bonds  authorized  for  investment  by  paragraph  (g)  of 
subdivision  3  of  this  section  must  be  secured  by  a  mortgage  or 
deed  of  trust  which  is  at  the  time  of  making  such  investment ; 
either 

I.  A  closed  first  mortgage  or  deed  of  trust ;  or 

II.  A  first  mortgage  or  deed  of  trust  containing  provisions 
restricting  the  issuance  of  further  bonds  until  such  time  as 
the  income  of  said  corporation  shall  have  been  at  least  suffi- 
cient, during  the  twelve  months  next  preceding  the  issuance 
of  any  additional  bonds,  to  meet  the  earning  requirements 
specified  in  the  respective  subdivisions  of  this  paragraph  appli- 
cable to  such  corporation  after  including  the  additional  bonds 
then  proposed  to  be  issued ;  or 

III.  A  refunding  mortgage  or  deed  of  trust  providing  for 
the  retirement  of  all  prior  lien  mortgage  debts  of  said  corpora- 
tion and  restricting  the  issuance  of  further  bonds  until  such 
time  as  the  income  of  said  corporation  shall  have  been  at  least 
sufficient,  during  the  twelve  months  next  preceding  the  issu- 
ance of  any  additional  bonds,  to  meet  the  earning  requirements 
of  such  corporation  after  including  the  additional  bonds  then 
proposed  to  be  issued ;  or 

IV.  An  underlying  or  divisional  closed  mortgage  or  deed 
of  trust  of  property  which  forms  a  part  of  the  operating  sys- 
tem of  the  corporation  then  owning  said  property.  In  the  case 
of  bonds  secured  by  an  underlying  or  divisional  closed  mort- 
gage or  deed  of  trust,  the  net  income  required  by  this  section 
shall  be  based  exclusively  upon  the  income,  maintenance 
charges,  operating  expenses,  taxes  and  mortgage  indebtedness 
of  or  against  the  property  covered  by  such  underlying  or  di- 
visional closed  mortgage  or  deed  of  trust  or,  if  such  income, 
maintenance  charges  or  operating  expenses  can  not  be  defi- 
nitely ascertained,  on  the  proper  proportionate  share  of  such 
property  in  the  general  income,  maintenance  charges,  operat- 
ing expenses  and  taxes  of  the  corporation  then  owning  such 


52  CALIFORNIA  BANK   ACT 

property  and  on  the  mortgage  indebtedness  of  or  against  the 
property  covered  by  such  underlying  or  divisional  closed  mort- 
gage or  deed  of  trust ;  provided,  however,  that  if  the  payment 
of  the  bonds  secured  by  such  underlying  or  divisional  closed 
mortgage  or  deed  of  trust  shall  be  guaranteed  or  assumed  by 
the  corporation  then  owning  the  property  securing  the  same, 
such  bonds  shall  be  legal  investments  for  savings  banks,  if  the 
net  income  of  such  corporation  from  all  sources  shall  equal 
the  amount  herein  required,  notwithstanding  any  insufficiency 
of  the  income  derived  from  the  property  covered  by  such  un- 
derlying or  divisional  closed  mortgage  or  deed  of  trust  to  meet 
the  requirements  of  this  section. 

The  terms,  "street  railroad  corporation,"  "pipe  line  cor- 
poration, "  "  gas  corporation, "  "  electrical  corporation, "  "  tele- 
phone corporation,"  "telegraph  corporation,"  "water  cor- 
poration, ' '  and  ' '  public  utility, ' '  when  used  in  paragraph  (g) 
of  subdivision  3  of  this  section,  shall  each  have  the  mean- 
ing defined  in  the  "Public  Utilities  Act"  approved  Decem- 
ber 23,  1911. 

(h)  Notes  or  bonds  secured  by  first  mortgage  or  deed  of 
trust  or  other  first  lien  upon  real  estate,  improved  or  unim- 
proved ;  provided,  that  the  entire  note  or  bond  issue  shall  not 
exceed  sixty  per  centum  of  the  market  value  of  such  real  estate, 
or  such  real  estate  with  improvements,  taken  as  security ;  and 
provided,  further,  in  case  the  said  note  or  bond  issue  is  created 
for  a  building  loan  on  real  estate,  that  at  no  time  shall  the 
entire  outstanding  note  or  bond  issue  exceed  sixty  per  centum 
of  the  market  value  of  the  real  estate  and  the  actual  cost  of 
the  improvements  thereon  taken  as  security. 

In  determining  the  market  value  of  any  real  estate  under 
the  provisions  of  paragraph  (h)  subdivision  3  of  this  section 
where  such  real  estate,  improved  or  unimproved,  consists  of  oil 
or  other  mineral  or  timber  land,  the  value  represented  by  such 
oil  or  other  mineral  or  timber  shall  not  be  included  in  fixing 
such  market  value. 

(i)    Collateral  trust  bonds  or  notes  when  secured  by  either : 

(1)  Deposit  of  bonds  authorized  for  investment  by  this  sec- 
tion of  a  market  value  at  least  fifteen  per  centum  in  excess 
of  the  par  value  of  the  collateral  trust  bonds  or  notes  issued ;  or 


CALIFORNIA  BANK  ACT  53 

(2)  Deposit  of  bonds  authorized  for  investment  by  this  sec- 
tion and  other  securities  of  a  combined  market  value  at  least 
twenty  per  centum  in  excess  of  the  par  value  of  the  collateral 
trust  bonds  or  notes  issued;  provided,  that  the  par  value  of 
said  collateral  trust  bonds  or  notes  shall  in  no  case  exceed  the 
market  value  of  that  portion  of  the  security  represented  by 
bonds  authorized  for  investment  by  this  section. 

(3)  Deposit  of  any  notes  or  bonds  authorized  for  invest- 
ment by  this  section  and  other  securities  of  a  combined  market 
value  of  at  least  thirty  per  centum  in  excess  of  the  par  value  of 
the  collateral  trust  bonds  or  notes  issued ;  provided,  that  the 
par  value  of  such  collateral  trust  bonds  or  notes  issued  shall  in 
no  case  exceed  the  market  value  of  that  portion  of  the  security 
represented  by  notes  or  bonds  authorized  for  investment  by  this 
section ;  provided,  further,  that  the  collateral  pledged  consist 
of  bonds  authorized  for  investment  by  this  section  of  the  mar- 
ket value  of  at  least  seventy-five  per  centum  of  the  par  value 
of  such  collateral  trust  bonds  or  notes  issued. 

(j)  Bonds  legal  for  investment  by  savings  banks  in  the 
states  of  New  York  or  Massachusetts ;  provided,  however,  that 
as  to  bonds  of  the  character  specified  in  paragraph  (c)  or  (e) 
of  subdivision  3  of  this  section,  such  bonds  shall  also  conform 
to  the  requirements  of  either  of  such  paragraphs. 

(k)  Notes  or  bonds  secured  by  mortgage  or  deed  of  trust, 
payment  of  which  is  guaranteed  by  a  policy  of  mortgage  in- 
surance, and  mortgage  participation  certificates,  issued  by  a 
mortgage  insurance  company  in  accordance  with  the  provis- 
ions of  chapter  VIII  of  title  II  of  part  IV  of  division  first  of 
the  Civil  Code. 

"Net  earnings"  as  used  in  this  section  shall  be  deemed  to 
mean  the  amount  remaining  after  deducting  from  the  gross 
earnings  all  taxes,  maintenance  charges  and  operating  expenses 
except  depreciation  charges,  sinking  fund  charges  and  interest 
on  indebtedness. 

Unless  herein  otherwise  expressly  provided  the  period  for 
which  any  corporation  must  have  "net  earnings"  sufficient  to 
qualify  its  bonds  as  an  investment  for  savings  banks  under  this 
section  shall  be  either  the  fiscal  year  of  such  corporation  next 


54  CALIFORNIA   BANK   ACT 

preceding  the  investment  therein  by  any  savings  bank  or 
twelve  consecutive  months  in  the  fourteen  months  next  preced- 
ing such  investment. 

No  notes,  bonds,  or  other  securities  shall  be  deemed  to  come 
within  or  conform  to  the  requirements  of  either  of  paragraphs 
(f)>  (9)  or  (i)  of  subdivision  3  of  this  section,  unless  such 
notes,  bonds  or  other  securities  shall,  in  the  manner  provided 
in  this  act,  have  been  certified  by  the  superintendent  of  banks 
to  come  within  and  fully  conform  to  the  requirements  of  one 
or  the  other  of  said  paragraphs ;  provided,  however,  that  notes, 
bonds  or  other  securities,  the  payment  of  which  is  secured  by 
any  mortgage  or  deed  of  trust  executed  on  or  before  Septem- 
ber 1,  1913,  and  now  owned  by  any  savings  bank  in  this  state, 
if  otherwise  in  full  conformity  with  the  requirements  of  this 
section,  need  not  be  so  certified  by  the  superintendent  of  banks, 
in  order  to  be  legal  as  investments  for  savings  banks. 

The  legality  of  investments  heretofore  lawfully  made  pur- 
suant to  the  provisions  of  this  section,  or  of  any  law  of  this 
state  as  it  existed  on  and  subsequent  to  July  1,  1909,  shall  not 
be  affected  by  any  amendments  to  this  section  or  this  act ;  nor 
shall  any  such  amendments  require  the  changing  of  invest- 
ments once  lawfully  made  under  this  act. 

Any  bonds  authorized  by  this  section  as  a  legal  investment 
for  savings  banks  may  be  carried  on  the  books  of  said  bank 
at  their  investment  value,  based  on  their  market  value  at  the 
time  they  were  originally  bought,  unless  the  superintendent 
of  banks  shall  require  any  or  all  of  the  bonds  which  may  there- 
after have  a  market  value  less  than  the  original  investment 
value  to  be  written  down  to  such  new  market  value  which  shall 
be  done  gradually  if  practicable  and  in  such  manner  as  he  may 
determine ;  or  he  may,  by  a  plan  of  amortization  to  be  deter- 
mined by  him,  require  such  gradual  extinction  of  premium  as 
will  bring  such  bonds  to  par  at  maturity. 

No  savings  bank  shall  hereafter  purchase  or  loan  money 
upon  any  bond,  note  or  other  evidence  of  indebtedness,  issued 
by  any  "public  utility,"  subject  to  the  jurisdiction,  regulation 
or  control  of  the  railroad  commission  of  this  state  under  the 
provisions  of  the  "Public  Utilities  Act,"  approved  December 


CALIFORNIA   BANK   ACT  55 

23, 1911,  and  acts  amendatory  thereof  or  supplemental  thereto, 
unless  each  such  bond,  note  or  other  evidence  of  indebtedness 
was  either: 

(a)  Issued  prior  to  the  taking  effect  of  the  ' '  Public  Utilities 
Act";   or 

(b)  Issued  under  authority  of  the  railroad  commission,  in 
accordance  with  the  provisions  of  said  act ;   or 

(c)  A  note  issued  for  a  period  not  exceeding  twelve  months, 
in  accordance  with  the  provisions  of  subdivision  ( b)  of  section 
fifty-two  of  said  act. 

No  provision  of  this  act,  and  no  act,  or  deed,  done  or  per- 
formed under  or  in  connection  therewith,  and  no  finding  made 
or  certificate  issued  under  any  provision  thereof,  shall  be  held 
or  construed  to  obligate  the  State  of  California  to  pay,  or  be 
liable  for  the  payment  of,  or  to  guarantee  in  any  manner  what- 
soever, the  regularity  or  the  validity  of  the  issuance  of  any 
stock  or  bond  certificate,  or  bond,  note,  or  other  evidence  of 
indebtedness  certified  under  any  provision  of  this  act,  by  the 
superintendent  of  banks,  as  being  in  conformity  with  the  re- 
quirements of  any  paragraph  of  subdivision  3  of  this  section. 

It  shall  not  be  lawful  for  any  individual,  firm,  association, 
bank,  trust  company,  stock  company,  copartnership  or  corpo- 
ration to  advertise  by  newspaper  or  circular  or  in  any  other 
manner  that  any  bonds  are  legal  investments  for  savings  banks 
in  this  state  or  to  use  any  advertisement  which  might  lead  the 
public  to  believe  that  any  bonds  conform  to  the  requirements 
of  law  relating  to  investments  by  savings  banks  unless  such 
bonds  are  such  as  are  specified  in  paragraph  (a),  (b),  (c),  (d), 
(e),  (j),  or  (k)  of  subdivision  3  of  this  section  or  shall,  in  the 
manner  provided  in  this  act,  have  been  certified  by  the  super- 
intendent of  banks  to  come  within  and  fully  conform  to  the 
requirements  of  one  or  the  other  of  paragraphs  (f),  (g),  (k), 
or  (i)  of  subdivision  3  of  this  section  or  unless  such  advertise- 
ment shall  have  been  approved  in  writing  by  the  superinten- 
dent of  banks  prior  to  publishing,  circulating  or  otherwise 
issuing  the  same.  Any  individual,  firm,  association,  bank,  trust 
company,  stock  company,  copartnership  or  corporation  who 
shall  advertise  any  bonds  in  violation  of  the  provisions  of  this 


56  CALIFORNIA   BANK   ACT 

paragraph  shall  be  guilty  of  a  misdemeanor  and  shall  be  pun- 
ishable by  a  fine  not  exceeding  one  thousand  dollars  or  by  im- 
prisonment in  a  county  jail  not  exceeding  one  year  or  by  both 
such  fine  and  imprisonment. 

Sec.  61a.  The  superintendent  of  banks  shall  have  power, 
when  any  issue  of  bonds  or  securities  is  presented  to  him  for 
that  purpose,  to  investigate  and  ascertain  whether  such  bonds 
or  securities  come  within  and  fully  conform  to  all  the  require- 
ments of  paragraphs  (f),  (g),  (h),  or  (i)  of  subdivision  3  of 
section  sixty-one  of  this  act,  or  of  either  of  said  paragraphs. 
He  may  also  investigate  and  ascertain  for  what  period  of  time, 
and  upon  what  conditions,  any  franchise  granted  to  or  held  by 
any  corporation  issuing  any  such  bonds  or  securities  will  re- 
main in  force,  and  any  other  facts  or  conditions  bearing  upon 
the  value  or  sufficiency  of  such  bonds.  The  actual  expense  of 
investigating  any  issue  of  bonds  or  securities  so  presented  shall 
be  paid  by  the  person  or  corporation  presenting  the  same  for 
investigation,  and  the  superintendent  of  banks,  before  making 
such  investigation,  may  require  a  cash  deposit  of  such  amount 
as  he  may  deem  necessary  to  cover  such  expense.  The  superin- 
tendent of  banks  may  accept  and  act  upon  the  opinions  and 
appraisements  of  any  attorneys  or  appraisers  which  may  be 
presented  by  such  person  or  corporation  so  applying,  and  the 
reports  of  any  of  the  executive  officers  of  the  corporation  issu- 
ing such  bonds  or  securities,  on  any  question  of  fact  concerning 
or  affecting  such  bonds  or  securities,  the  security  thereof,  the 
franchise  conditions  herein  mentioned,  or  the  financial  condi- 
tion of  the  corporation  issuing  the  same.  In  lieu  of  or  in  addi- 
tion to  such  opinions,  appraisements  and  reports,  the  superin- 
tendent of  banks  may,  if  he  deems  proper,  have  any  or  all  such 
matters  passed  upon  and  certified  to  him  by  attorneys,  ap- 
praisers or  accountants  of  his  own  selection  at  the  expense  of 
the  applicant.  If  the  superintendent  of  banks  shall  find  from 
such  investigation  that  the  bonds  or  securities  so  presented 
come  within  and  fully  conform  to  all  the  requirements  of  any 
of  said  paragraphs  of  subdivision  3  of  section  sixty-one  of  this 
act,  and  is  satisfied  from  such  investigation  as  to  such  franchise 
conditions,  he  shall  so  certify  unless  for  any  reason  he  shall  be 


CALIFORNIA  BANK  ACT  57 

of  the  opinion  that  such  bonds  are  not  a  safe  or  proper  invest- 
ment for  savings  banks,  and  in  such  event  or  if  such  bonds 
shall  fail  to  meet  the  requirements  of  this  act  such  certificate 
must  be  refused.  Any  bonds  certified  by  the  superintendent  of 
banks  as  in  this  section  provided  shall  thereafter  be  deemed 
to  be  legal  as  investments  for  savings  banks  until  three  months 
after  the  end  of  the  then  current  fiscal  year  of  such  corpora- 
tion unless  for  any  reason  the  superintendent  of  banks  shall 
have  revoked  such  certificate  and  during  such  time  but  not 
thereafter  bonds  so  certified  may  be  purchased  by  savings 
banks  without  further  certification.  The  superintendent  of 
banks  shall  keep  an  official  list  of  all  bonds  and  securities  cer- 
tified by  him. 

Sec.  62.  No  savings  bank  shall,  directly  or  indirectly,  deal 
or  trade  in  real  or  personal  property  in  any  other  case  or  for 
any  other  purpose  than  is  authorized  by  this  act,  and  shall  not 
contract  any  debt  or  liability  for  any  purpose  whatever  other 
than  for  deposits,  except  as  in  this  section  provided. 

Savings  banks  may  pay  regular  depositors,  when  requested 
by  them,  by  draft  upon  deposits  to  the  credit  with  their  banks, 
and  charge  current  rate  of  exchange  for  such  drafts. 

No  savings  bank  shall  borrow  money,  or  pledge  or  hypothe- 
cate any  of  its  securities,  except  to  meet  the  immediate  de- 
mands of  its  own  depositors,  and  then  only  in  pursuance  of  a 
resolution  adopted  by  a  vote  of  a  majority  of  its  board  of 
directors,  duly  entered  upon  their  minutes,  wherein  shall  be 
recorded  the  ayes  and  nays  upon  each  vote;  also  with  the 
written  approval  of  the  superintendent  of  banks,  and  he  shall 
have  the  authority  to  fix  the  amount  to  be  borrowed,  and  the 
term  and  rate  of  interest  thereon;  provided,  however,  that 
savings  banks  may,  in  the  manner  authorized  by  law,  and  with- 
out the  written  approval  of  the  superintendent  of  banks, 
borrow  the  public  moneys  of  the  state,  counties,  cities  and 
counties,  and  towns  and  receive  such  public  moneys  on  deposit ; 
provided,  also,  that  savings  banks  may  in  the  manner  author- 
ized by  law,  and  without  the  written  approval  of  the  superin- 
tendent of  banks,  borrow  postal  savings  moneys  of  the  United 
States,  and  receive  such  postal  savings  moneys  on  deposit. 


58  CALIFORNIA   BANK   ACT 

Sec.  63.  Savings  banks  may  issue  general  certificates  of  de- 
posit, which  are  transferable,  as  in  other  cases,  by  indorsement 
and  delivery ;  may  issue,  when  requested  by  the  depositor,  spe- 
cial certificates,  acknowledging  the  deposit  by  the  person 
therein  named  of  a  specified  sum  of  money,  and  expressly  pro- 
viding on  the  face  of  such  certificate  that  the  sum  so  deposited 
and  therein  named  may  be  transferred  only  on  the  books  of  the 
bank;  payment  thereafter  made  by  the  bank  to  the  depositor 
named  in  such  certificate,  or  to  his  assignee  named  upon  the 
books  of  the  bank,  or  in  case  of  death,  to  the  legal  representa- 
tive of  such  person,  of  the  sum  for  which  such  special  certifi- 
cate was  issued,  shall  discharge  the  bank  from  all  further  lia- 
bility on  account  of  the  money  so  paid. 

All  time  certificates  of  deposit,  issued  by  a  savings  bank, 
shall  be  subject  to  the  same  limitations  and  conditions  as  ap- 
plied to  other  deposits,  and  notice  thereof  shall  be  given  by  the 
words  "Subject  to  conditions  of  agreement  with  depositors" 
printed  on  the  face  of  the  certificate  issued. 

Sec.  64.  Each  savings  bank  must  prescribe  by  its  by-laws, 
or  by  contract  with  its  depositors,  the  time  and  conditions  on 
which  repayment  is  to  be  made  to  depositors,  except  as  in  this 
act  otherwise  provided.  In  all  cases  the  by-laws  or  contracts 
shall  provide  that  notice  of  at  least  thirty  days  may,  at  the 
option  of  any  such  bank,  be  required  to  be  given  of  intention  to 
withdraw  any  deposit  or  part  thereof,  but  whenever  there  is 
any  call  by  depositors  for  repayment  of  a  greater  amount  than 
the  bank  may  have  disposable  for  that  purpose,  the  directors 
or  officers  thereof  must  not  make  any  new  loan  or  investment 
of  the  funds  of  the  depositors  or  of  earnings  thereof  until  such 
excess  of  call  has  ceased.  The  directors  of  any  such  bank  hav- 
ing no  capital  stock  shall,  before  the  declaration  of  any  divi- 
dend, carry  at  least  one-tenth  part  of  the  net  profits  of  such 
bank,  for  the  preceding  half  year,  or  for  the  period  covered  by 
said  dividend,  to  its  reserve  fund.  Subject  to  the  provisions  of 
section  nineteen  of  this  act,  any  losses  sustained  by  any  such 
bank  may  be  charged  to  and  paid  out  of  its  reserve  fund.  A 
larger  reserve  fund  may  be  created  and  nothing  herein  con- 
tained shall  be  construed  as  prohibitory  thereof.   The  assets  of 


CALIFORNIA   BANK   ACT  59 

any  such  bank  are  a  security  to  its  depositors.  Any  such  bank 
organized  without  capital  stock,  may  provide  by  its  by-laws  for 
the  disposal  of  any  amount  in  its  reserve  fund  in  excess  of  the 
amount  required  by  section  nineteen  of  this  act  and  may  also 
provide  for  final  disposal  upon  the  dissolution  of  the  bank  of 
its  reserve  fund  or  the  balance  thereof  remaining  after  pay- 
ment of  any  losses  of  such  bank. 

Sec.  65.  No  loan  shall  be  made,  for  himself  or  as  agent  or 
partner  of  another,  directly  or  indirectly,  to  any  director  or 
officer  of  any  savings  bank  by  such  bank,  or  on  the  endorse- 
ment, surety  or  guaranty  of  any  such  officer  or  director,  ex- 
cept that  loans  may  be  made  to  any  corporation  in  which  any 
director  or  officer  of  such  savings  bank  may  own  or  hold  a  mi- 
nority number  of  shares  of  stock,  upon  authorization  of  a  ma- 
jority of  all  the  directors  of  such  savings  bank  and  the 
affirmative  vote  of  all  directors  of  such  savings  bank  present  at 
the  meeting  authorizing  such  loan;  provided,  however,  that 
such  loan  shall  in  all  other  respects  conform  to  and  comply 
with  all  other  provisions  of  this  act.  Such  interested  director 
or  officer  shall  not  vote  or  participate  in  any  manner  in  the 
action  of  the  board  on  such  loan.  Such  authorization  shall  be 
entered  upon  the  records  or  minutes  of  such  savings  bank.  The 
fact  of  making  such  loan,  the  names  of  the  directors  authoriz- 
ing such  loan,  the  corporate  name  of  the  borrower,  the  name 
of  each  director  or  officer  of  such  bank  who  is  a  member,  stock- 
holder, officer,  or  director  of  the  corporation  to  which  such  loan 
is  made,  the  amount  of  stock  held  by  him  in  such  borrowing 
corporation,  the  amount  of  such  loan,  the  rate  of  interest 
thereon,  the  time  when  the  loan  will  become  due,  the  amount, 
character  and  value  of  security  given  therefor  and  the  fact  of 
final  payment,  when  made,  shall  be  forthwith  reported  in 
writing  by  the  cashier  or  secretary  of  such  savings  bank  to  the 
superintendent  of  banks.  No  loan  may  be  made  to  any  cor- 
poration, a  majority  of  the  stock  of  which  is  owned  or  con- 
trolled by  any  one  or  more  of  the  directors  or  officers  of  such 
savings  bank,  except  with  the  previous  consent  of  the  superin- 
tendent of  banks. 

A  loan  may  be  made  to  any  agent  or  employee,  other  than 
an  officer  or  director,  of  any  savings  bank  by  such  bank  upon 


60  CALIFORNIA   BANK   ACT 

authorization  of  a  majority  of  all  the  directors  of  such  savings 
bank  and  an  affirmative  vote  of  all  directors  of  such  savings 
bank  present  at  the  meeting  authorizing  such  loan ;  provided, 
however,  that  such  loan  shall  in  all  respects  conform  to  and 
comply  with  all  other  provisions  of  this  act.  Such  authoriza- 
tion shall  be  entered  upon  the  records  or  minutes  of  such  sav- 
ings bank.  The  fact  of  making  such  loan,  the  names  of  the 
directors  authorizing  such  loan,  the  name  of  the  borrower,  the 
nature  of  his  employment,  the  amount  of  such  loan,  the  rate  of 
interest  thereon,  the  time  when  the  loan  will  become  due,  the 
amount,  character  and  value  of  the  security  given  therefor, 
and  the  fact  of  final  payment,  when  made,  shall  be  forthwith 
reported  in  writing  by  the  cashier  or  secretary  of  such  savings 
bank  to  the  superintendent  of  banks.  Any  officer  or  director 
of  any  savings  bank,  who  knowingly  procures  a  loan  from  such 
savings  bank,  contrary  to  the  provisions  of  this  section,  shall 
be  guilty  of  a  felony.  In  case  of  the  neglect  or  failure  of  the 
secretary  or  cashier  of  any  such  bank,  to  report  to  the  superin- 
tendent of  banks,  as  herein  provided,  any  of  the  facts  so  re- 
quired to  be  reported,  the  bank  shall  be  liable  therefor  and 
shall  forfeit  to  the  people  of  the  State  of  California  twenty- 
five  dollars  per  day  for  each  day,  or  part  thereof,  during  which 
such  neglect  or  failure  continues. 

This  section  shall  not  apply  to  any  loan  made  to  a  religious 
corporation,  club,  or  other  membership  corporation  of  which 
one  or  more  directors,  officers,  agents  or  employees  of  such  sav- 
ings bank  may  be  members  or  officers,  but  in  which  they  have 
no  financial  interest. 

Sec.  66.  No  savings  bank  shall  hereafter  make  any  loans  to 
any  person,  firm,  copartnership  or  corporation  to  an  amount 
exceeding  fifty  per  centum  of  the  actual  paid-up  capital  stock 
and  surplus  of  such  bank,  or  in  the  case  of  a  bank  organized 
without  capital  stock,  to  an  amount  exceeding  fifty  per  centum 
of  the  reserve  fund  of  such  bank ;  provided,  however,  that  any 
savings  bank  having  a  paid-up  capital  and  surplus  of  less  than 
fifty  thousand  dollars,  but  not  less  than  twenty-five  thousand 
dollars,  may  make  any  such  loan  on  real  estate  security  to  an 
amount  not  exceeding  twenty-five  thousand  dollars ;   and  pro- 


CALIFORNIA   BANK   ACT  61 

vided  further,  that  any  savings  bank  having  a  paid-up  capital 
and  surplus  of  less  than  twenty-five  thousand  dollars  may  make 
any  such  loan  on  real  estate  security  to  an  amount  not  exceed- 
ing its  paid-up  capital  and  surplus,  if  each  such  loan  in  all 
other  respects  conforms  to  the  provisions  of  this  act.  The  re- 
newal or  extension  of  any  loan  heretofore  legally  made  by  any 
savings  bank  shall  not  be  construed  to  be  a  "loan  hereafter 
made"  within  the  meaning  of  the  provisions  of  this  section. 
The  legality  of  investments  heretofore  lawfully  made  pursuant 
to  the  provisions  of  this  act  as  it  existed  on  and  subsequent  to 
July  1,  1909,  shall  not  be  affected  by  the  provisions  of  this  sec- 
tion. For  the  purposes  of  this  section  an  endorser  or  guarantor 
shall  be  deemed  to  be  a  borrower. 

Sec.  67.  1.  No  savings  bank  shall  loan  money  except  on  ade- 
quate security  of  real  or  personal  property,  and  no  such  loan 
shall  be  made  for  a  period  longer  than  ten  years.  No  such  loan 
shall  be  made  on  unsecured  notes;  provided,  that  a  savings 
bank  may,  under  such  conditions  and  regulations  as  the  super- 
intendent of  banks  may  prescribe,  discount  or  purchase  com- 
mercial paper  of  the  kind  and  character  made  eligible  under 
the  federal  reserve  act  and  the  then  current  regulation  of  the 
federal  reserve  board  for  re-discount  or  for  purchase  in  the 
open  market  by  a  federal  reserve  bank;  provided,  however, 
that  no  savings  bank  shall  at  any  time  acquire  by  discount  or 
purchase  an  amount  of  such  commercial  paper  greater  than 
five  per  centum  of  its  deposits  nor  shall  any  savings  bank  ac- 
quire, directly  or  indirectly,  by  discount  or  purchase,  any  such 
commercial  paper  of  or  from  any  person,  firm,  copartnership 
or  corporation  in  an  amount  which  shall  exceed  five  per  centum 
of  the  capital  and  surplus  of  such  bank. 

2.  No  savings  bank  shall  invest  or  loan  an  amount  greater 
than  fifty  per  centum  of  its  actual  paid-up  capital  and  surplus 
on  any  one  bond  issue  of  the  class  specified  in  paragraph  (h) 
of  subdivision  3  of  section  sixty-one  of  this  act,  nor  more  than 
five  per  centum  of  its  assets  on  any  one  bond  issue  of  any  other 
class,  except  bonds  of  the  United  States,  of  the  State  of  Cali- 
fornia, bonds  for  which  the  faith  and  credit  of  the  United 
States  or  of  the  State  of  California  are  pledged,  or  bonds  of 


62  CALIFORNIA   BANK   ACT 

any  county,  city  and  county,  city  or  school  district  in  this 
state,  or  bonds  of  any  irrigation  district  such  as  are  legal  for 
investment  by  savings  banks. 

3.  No  savings  bank  shall  loan  money : 

(a)  On  bonds  of  the  character  specified  in  paragraphs  (a), 
(~b),  (c),  and  (d)  of  subdivision  3  of  section  sixty-one  of  this 
act,  unless  such  bonds  shall  have  a  market  value  at  least  ten 
per  centum  in  excess  of  the  amount  loaned  thereon ;  or, 

(b)  On  bonds  of  the  character  specified  in  paragraphs  (e), 
(f)  and  (g)  or  on  bonds  or  notes  of  the  character  specified  in 
paragraph  (i)  of  subdivision  3  of  section  sixty-one  of  this  act, 
unless  such  bonds  or  notes  shall  have  a  market  value  at  least 
fifteen  per  centum  in  excess  of  the  amount  loaned  thereon ;  or, 

(c)  On  bonds  legal  for  investment  by  savings  banks  in  the 
states  of  New  York  or  Massachusetts,  unless  such  bonds  shall 
have  a  market  value  at  least  fifteen  per  centum  in  excess  of  the 
amount  loaned  thereon ;  or, 

(d)  On  personal  property  unless  such  personal  property 
shall  have  a  market  value  at  least  fifty  per  centum  in  excess 
of  the  amount  loaned  thereon ;   or, 

(e)  On  other  bonds,  or  on  the  capital  stock  of  any  corpora- 
tion, unless  such  bonds  or  stock  shall  have  a  market  value  at 
least  fifty  per  centum  in  excess  of  the  amount  loaned  thereon ; 
provided,  however,  that  no  loan  shall  be  made  upon  the  capital 
stock  of  any  bank  unless  such  bank  has  been  in  existence  at 
least  two  years  and  has  earned  and  paid  a  dividend  on  its 
capital  stock. 

4.  No  savings  bank  shall  make  any  loan  on  the  security  of 
real  estate,  except  it  be  a  first  lien,  and  in  no  event  to  exceed 
sixty  per  centum  of  the  market  value  of  any  real  estate  taken 
as  security  except  for  the  purpose  of  facilitating  the  sale  of 
property  owned  by  such  savings  bank ;  provided,  that  a  second 
lien  may  be  accepted  to  secure  the  repayment  of  a  debt  pre- 
viously contracted  in  good  faith ;  and,  provided,  also,  that  any 
savings  bank  holding  a  first  mortgage  or  deed  of  trust  on  real 
estate  may  take  or  purchase  and  hold  another  and  immediately 


CALIFORNIA   BANK   ACT  63 

subsequent  mortgage  or  deed  of  trust  thereon,  but  all  such 
loans  shall  not  exceed  in  the  aggregate  sixty  per  centum  of  the 
market  value  of  the  real  estate  securing  the  same;  provided, 
further,  that  a  savings  bank  may  loan  not  to  exceed  ninety  per 
centum  of  the  face  value  of  a  note  or  bond  secured  by  a  first 
mortgage  or  deed  of  trust  on  real  estate,  but  in  no  event  shall 
any  such  loan  exceed  ninety  per  centum  of  sixty  per  centum  of 
the  market  value  of  the  real  estate  covered  by  said  mortgage  or 
deed  of  trust. 

5.  No  savings  bank  shall  loan  to  any  one  borrower  on  the 
security  of  the  capital  stock  of  any  corporation  an  amount  ex- 
ceeding ten  per  centum  of  the  capital  stock  and  surplus  of  such 
savings  bank ;  provided,  that  all  loans  on  the  capital  stock  of 
any  one  corporation  shall  not  exceed  in  the  aggregate  twenty- 
five  per  centum  of  the  capital  stock  and  surplus  of  such  sav- 
ings bank.  No  savings  bank  shall  purchase,  invest  or  loan  its 
capital,  surplus  or  the  money  of  its  depositors,  or  any  part  of 
either,  in  mining  shares  or  stock. 

Any  president  or  managing  officer  who  knowingly  consents 
to  a  violation  of  any  provision  of  this  section  shall  be  guilty  of 
a  felony. 

Sec.  68.  Every  savings  bank  or  savings  department  of  a  bank, 
shall  at  all  times  maintain  total  reserves  equivalent  to  five  per 
centum  of  the  aggregate  amount  of  its  deposits;  at  least  two 
and  one-half  per  centum  of  such  deposits  shall  be  maintained 
as  reserves  on  hand,  one-half  of  which  shall  consist  of  gold  coin, 
gold  bullion,  United  States  gold  certificates  or  United  States 
notes  and  one-half  of  which  shall  consist  of  gold  coin,  gold 
bullion,  United  States  gold  certificates,  United  States  notes  or 
any  other  form  of  currency  authorized  by  the  laws  of  the 
United  States  and  two  and  one-half  per  centum  of  such  de- 
posits may  be  maintained  as  reserves  on  hand  and  may  consist 
of  bonds  of  the  United  States  or  of  gold  coin,  gold  bullion, 
United  States  gold  certificates,  United  States  notes  or  any  other 
form  of  currency  authorized  by  the  laws  of  the  United  States 
or  may  be  maintained  as  reserves  on  deposit  subject  to  call 
with  any  reserve  depositary  provided  for  in  section  twenty  of 
this  act ;   provided,  however,  that  no  savings  bank  or  savings 


64  CALIFORNIA   BANK   ACT 

department  shall  be  required  to  maintain  reserves  on  hand  in 
excess  of  four  hundred  thousand  dollars,  and  when  such  re- 
serves on  hand  reach  that  amount,  the  balance  of  total  reserves 
necessary  to  make  up  the  five  per  centum  may  be  kept  as  re- 
serves on  deposit  subject  to  call  with  any  reserve  depositary 
provided  for  in  section  twenty  of  this  act.  No  new  loan  shall  be 
made  during  any  deficiency  in  the  total  reserves.  Deposits  with 
any  commercial  bank,  or  commercial  department  of  a  bank,  on 
open  account,  as  provided  in  this  section,  shall  be  permitted, 
and  shall  not  be  construed  as  loans.  Not  more  than  five  per 
centum  of  the  deposits  of  any  savings  bank  shall  be  deposited 
with  any  one  bank,  except  with  the  consent  of  the  superinten- 
dent of  banks.  Not  more  than  fifteen  per  centum  of  the  de- 
posits of  any  savings  bank  shall  be  deposited  with  all  other 
banks,  except  with  the  consent  of  the  superintendent  of  banks. 
No  savings  bank  or  savings  department  shall  receive  deposits 
of  other  banks  other  than  savings  deposits  and  such  deposits 
shall  not  be  treated  or  considered  as  a  part  of  the  reserves  on 
deposit  of  such  depositing  bank;  provided,  that  the  sum  so 
deposited  shall  not  exceed  ten  thousand  dollars. 

Sec.  68^2.  Where  a  decedent,  at  the  time  of  his  or  her  death, 
left  moneys  on  deposit  with  a  savings  bank,  it  shall  be  lawful 
for  any  public  administrator,  who  shall  become  the  administra- 
tor of  the  estate,  to  allow  such  deposit  to  remain  in  said  sav- 
ings bank,  and  also,  it  shall  be  lawful  for  him  to  deposit  therein 
to  the  account  of  said  decedent,  any  and  all  moneys  of  said 
estate  not  required  for  the  current  expenses  of  administration. 
Such  deposit,  whether  made  by  the  decedent  or  a  public  ad- 
ministrator, shall  relieve  the  public  administrator  from  depos- 
iting the  same  with  the  county  treasurer.  Moneys  so  deposited, 
whether  by  the  decedent  or  by  a  public  administrator,  may  be 
drawn  upon  demand  without  notice,  upon  the  order  of  said 
administrator,  countersigned  by  a  judge  of  a  superior  court, 
when  required  for  the  purpose  of  administration  or  otherwise. 

Sec.  69.  Every  savings  bank,  and  the  business  of  every 
savings  department  of  every  other  bank,  must  be  conducted 
under  and  in  accordance  with  the  provisions  of  this  act. 


CALIFORNIA   BANK   ACT  *  65 

ARTICLE  III. 

COMMERCIAL  BANKS. 

Sec.  80.  No  commercial  bank  shall  make  any  loans,  directly 
or  indirectly,  to  any  person,  firm,  co-partnership  or  corpora- 
tion, in  an  amount  which,  including  therein  any  extension  of 
credit  to  such  person,  firm,  co-partnership  or  corporation,  by 
means  of  letters  of  credit,  or  by  acceptance  of  drafts  for,  or 
the  discount  or  purchase  of  the  notes,  bills  of  exchange  or 
other  obligations  of,  such  person,  firm,  co-partnership  or  cor- 
poration, shall  exceed  the  following  percentage  of  its  capital 
and  surplus. 

1.  Ten  per  centum  without  security,  except  where  such  cap- 
ital stock  and  surplus  is  not  more  than  twenty-five  thousand 
dollars,  in  which  event  an  amount  not  to  exceed  twenty  per 
centum  of  such  capital  stock  and  surplus  may  be  loaned  with- 
out security,  and  where  such  capital  stock  and  surplus  is 
greater  than  twenty-five  thousand  dollars  and  does  not  exceed 
fifty  thousand  dollars,  a  sum  not  exceeding  five  thousand  dol- 
lars may  be  loaned  without  security.  Nothing  herein  shall 
prohibit  any  commercial  bank  from  taking  or  receiving  any 
kind,  character  or  amount  of  security  whatsoever,  either  real 
or  personal,  for  the  protection  of  any  loan  made  under  the  pro- 
visions of  this  subdivision,  but  no  such  loan  or  any  part  thereof 
shall  be  considered  or  construed  as  a  secured  loan  unless  the 
whole  thereof  is  loaned  upon  security  worth  at  least  fifteen 
per  centum  more  than  the  amount  of  such  loan ;  or, 

2.  Fifteen  per  centum,  in  addition  to  the  amount  that  may 
be  loaned  under  the  provisions  of  subdivision  one  of  this  sec- 
tion, upon  security  worth  at  least  fifteen  per  centum  more  than 
the  amount  of  such  loan  so  secured ;  provided,  the  total  amount 
which  can  be  loaned  under  subdivisions  one  and  two  hereof 
can  not  exceed  twenty-five  per  centum  in  all ;  provided,  how- 
ever, that  a  separate  note  or  notes  shall  be  taken  for  the  unse- 
cured loans  and  a  separate  note  or  notes  shall  be  taken  for  the 
secured  loans,  and  the  secured  and  unsecured  loans  shall  not 
be  combined  in  any  way  within  one  note,  or  notes ;  or, 


66  CALIFORNIA   BANK   ACT 

3.  Twenty-five  per  centum  upon  security  worth  at  least  fif- 
teen per  centum  more  than  the  amount  of  its  loans  so  secured ; 
provided,  however,  that  when  secured  loans  to  this  amount  or 
any  amount  in  excess  of  fifteen  per  centum  are  made,  then  no 
unsecured  loans  shall  be  permitted  in  addition  to  such  secured 
loans;  or, 

4.  Forty  per  centum,  provided  such  loans  are  upon  com- 
mercial or  business  paper  actually  owned  by  the  person  nego- 
tiating the  same  to  such  bank,  and  are  endorsed  by  such  person 
without  limitation ;  provided,  however,  that  in  addition  to  the 
amounts  permitted  to  be  loaned  by  subdivisions  one,  two  or 
three  of  this  section,  an  amount  may  be  loaned  on  the  securities 
fixed  by  subdivision  four  of  this  section,  which  taken  with  the 
amounts  so  permitted  by  said  subdivisions  one,  two  or  three 
will  not  exceed  forty  per  centum;  provided,  also,  that  the 
restrictions  under  this  section  shall  not  apply  to  bills  of 
exchange  or  drafts,  with  bills  of  lading  attached,  drawn  in 
good  faith  against  actual  existing  values;  provided,  further, 
that  any  commercial  bank,  having  first  obtained  in  writing  the 
consent  of  the  superintendent  of  banks  so  to  do  and  under 
such  conditions  and  regulations  as  may  be  prescribed  by  him, 
may  accept  drafts  or  bills  of  exchange  drawn  upon  it  running 
for  a  period  not  longer  than  six  months,  but  no  commercial 
bank  shall  accept  such  drafts  or  bills  of  exchange  in  an  amount 
greater  at  any  time  in  the  outstanding  aggregate  than  one-half 
of  its  capital  and  surplus ;  but  such  acceptance  or  acceptances 
must  be  drawn  by  a  person,  firm,  co-partnership  or  corporation 
engaged  in  agricultural,  industrial  or  commercial  business 
directly  connected  with  the  production,  manufacture,  purchase, 
sale  or  consignment  of  the  goods  involved  in  the  transaction 
in  which  the  acceptance  originated;  provided,  however,  that 
no  such  acceptance  or  acceptances  to  any  one  person,  firm, 
co-partnership  or  corporation  shall  exceed  ten  per  centum  of 
the  capital  and  surplus  of  such  bank. 

In  computing  the  total  liabilities  of  any  person  to  a  commer- 
cial bank  there  shall  be  included  all  liabilities  to  the  bank 
of  any  co-partnership  or  unincorporated  association  of  which 
he  is  a  member,  and  any  loans  made  for  his  benefit  or  for  the 


CALIFORNIA   BANK   ACT  67 

benefit  of  such  co-partnership  or  unincorporated  association; 
of  any  firm,  co-partnership  or  unincorporated  association  to  a 
commercial  bank  there  shall  be  included  all  liabilities  of  its 
individual  members  and  all  loans  made  for  the  benefit  of  such 
co-partnership  or  unincorporated  association  or  any  member 
thereof;  and  of  any  corporation  to  a  commercial  bank  there 
shall  be  included  all  loans  made  for  the  benefit  of  the  cor- 
poration. 

Sec.  81.  No  loan  shall  be  made  by  any  commercial  bank 
upon  the  securities  of  one  or  more  corporations,  the  payment 
of  which  is  undertaken,  in  whole  or  in  part,  severally,  but  not 
jointly,  by  two  or  more  individuals,  firms,  or  corporations : 

(a)  If  the  borrowers  or  underwriters  be  obligated  abso- 
lutely or  contingently  to  purchase  the  securities,  or  any  of 
them,  collateral  to  such  loan,  unless  the  borrowers  or  under- 
writers shall  have  paid  on  account  of  the  purchase  of  such 
securities  an  amount  in  cash,  or  its  equivalent,  equal  to  at 
least  twenty-five  per  centum  of  the  several  amounts  for  which 
they  remain  obligated  in  completing  the  purchase  of  such 
securities ; 

( b)  If  the  commercial  bank  making  such  loan  be  liable, 
directly  or  indirectly,  or  contingently,  for  the  repayment  of 
such  loan  or  any  part  thereof ; 

(c)  If  its  term,  including  any  renewal  thereof  by  agree- 
ment, express  or  implied,  exceed  the  period  of  one  year; 

(d)  Or  to  an  amount  under  any  circumstances  in  excess  of 
twenty-five  per  centum  of  the  capital  and  surplus  of  the  com- 
mercial bank  making  such  loan. 

Sec.  82.  Every  commercial  bank  hereafter  organized  must 
have  paid  up  in  cash  a  capital  stock  of  not  less  than, 

(a)  Twenty-five  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  locality  the  population  of  which 
does  not  exceed  five  thousand  persons; 

( b)  Fifty  thousand  dollars  if  its  principal  place  of  busi- 
ness is  located  in  any  city  the  population  of  which  is  more 
than  five  thousand  persons  but  does  not  exceed  twenty-five 
thousand  persons; 


68  CALIFORNIA   BANK   ACT 

(c)  One  hundred  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  city  the  population  of  which 
is  more  than  twenty-five  thousand  persons  but  does  not  exceed 
one  hundred  thousand  persons ; 

(d)  Two  hundred  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  city  the  population  of  which  is 
more  than  one  hundred  thousand  persons  but  does  not  exceed 
two  hundred  thousand  persons; 

(e)  Three  hundred  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  city  the  population  of  which  is 
more  than  two  hundred  thousand  persons. 

The  foregoing  classification  shall  not  apply  to  any  commer- 
cial bank  already  in  existence  which  has  received  its  certificate 
to  do  a  banking  business  from  the  superintendent  of  banks; 
nor  to  any  bank  the  location  of  which  shall  have  been  included 
by  annexation  or  consolidation  within  the  limits  of  a  city  of  a 
class  requiring  a  larger  capitalization,  but  no  bank  thus 
excepted  shall  be  permitted  to  establish  any  new  branch  office 
as  provided  in  section  nine  of  this  act  or  to  remove  its  place 
of  business  from  the  original  limits  of  the  city  or  township 
wherein  it  was  located  prior  to  such  annexation  or  consolida- 
tion until  it  shall  have  the  capital  required  of  banks  in  such 
city  not  within  said  exception.  Such  excepted  banks  may  not 
in  any  case  decrease  their  capital  stock  but  may  increase  the 
same  in  the  manner  provided  by  law  to  an  amount  either 
greater  or  less  than  that  required  of  banks  in  such  city  not 
within  said  exception;  provided,  that  nothing  herein  shall  be 
construed  to  affect  the  provisions  of  section  nineteen  of  this 
act  relative  to  the  proportion  of  capital  and  surplus  to  deposits 
or  of  section  twenty-three  of  this  act  relative  to  the  capital 
stock  required  of  banks  doing  a  departmental  business.  The 
provisions  of  section  twenty-three  of  this  act,  as  to  population, 
shall  apply  to  any  bank  organized  under  the  provisions  of  this 
section. 

Sec.  83.  No  loan  shall  be  made  for  himself  or  as  agent  or 
partner  of  another,  directly  or  indirectly,  to  any  officer  of  any 
commercial  bank  by  such  bank  or  on  the  endorsement,  surety, 
or  guaranty  of  any  such  officer ;  provided,  that  a  loan  may  be 


CALIFORNIA   BANK   ACT  69 

made  to  a  corporation  of  which  any  officer  of  a  commercial 
bank,  proposing  to  make  such  loan,  is  a  minority  stockholder, 
director,  officer,  agent  or  employee.  Loans  to  any  director, 
agent  or  employee,  other  than  an  officer,  or  to  any  firm,  co-part- 
nership or  corporation  of  which  any  director,  agent  or  em- 
ployee other  than  an  officer  is  a  member,  stockholder,  director, 
officer,  agent  or  other  employee,  or  to  any  person,  firm,  co- 
partnership or  corporation  on  the  endorsement,  surety,  or 
guaranty  of  any  such  director  other  than  an  officer,  agent  or 
other  employee,  can  be  made  by  any  commercial  bank.  Loans 
herein  authorized  can  be  made  only  on  authorization  of  or  con- 
firmation within  thirty  days  after  making  such  loan,  by  a 
majority  of  all  the  directors  of  such  bank  and  the  affirmative 
vote  of  all  directors  of  such  bank  present  at  the  meeting  au- 
thorizing or  confirming  such  loan.  Such  interested  director 
shall  not  vote  or  participate  in  any  manner  in  the  action  of  the 
board  on  such  loan.  The  board  of  directors  of  any  such  bank 
may  fix  the  total  amount  of  credit  that  may  at  any  one  time 
during  the  twelve  months  next  succeeding  be  given  to  any 
director,  agent,  or  other  employee,  other  than  an  officer,  or  to 
any  firm,  co-partnership  or  corporation  in  which  any  director, 
agent,  or  other  employee  other  than  an  officer  is  a  member, 
stockholder,  director,  officer,  agent  or  other  employee  or  to  any 
corporation  of  which  any  officer  of  a  commercial  bank,  propos- 
ing to  fix  such  total  amount  of  credit,  is  a  minority  stockholder, 
director,  officer,  agent  or  employee,  and  any  or  all  loans  made 
within  or  up  to  the  total  amount  of  such  authorized  credit  may 
at  any  time  during  said  twelve  months,  be  renewed  from  time  to 
time,  in  whole  or  in  part,  by  the  officers  of  the  bank  without 
any  further  vote  or  action  on  the  part  of  the  board  of  directors. 
Each  such  authorization  shall  be  entered  upon  the  records  or 
minutes  of  said  bank.  No  director  shall  vote  or  participate  in 
any  manner  in  such  action  of  the  board  fixing  the  total  amount 
of  credit  that  may  at  any  one  time  be  given  to  himself  or  to 
any  firm,  co-partnership  or  corporation  in  which  he  is  a  mem- 
ber, stockholder,  director,  officer,  agent  or  other  employee.  The 
fact  of  making  such  loan,  the  names  of  the  directors  authoriz- 
ing such  loan,  the  name  of  the  director,  agent  or  employee, 


70  CALIFORNIA   BANK   ACT 

obtaining  such  loan,  or  the  name  of  the  firm,  co-partnership 
or  corporation  in  which  such  director,  agent  or  employee  is 
interested  or  the  name  of  the  corporation,  of  which  any  officer 
of  a  commercial  bank  is  a  minority  stockholder,  director,  officer, 
agent  or  employee,  obtaining  such  loan,  the  amount  of  such 
loan,  the  rate  of  interest  thereon,  the  time  when  the  loan  will 
become  due,  the  amount,  character  and  value  of  security  given 
therefor,  if  any,  and  the  fact  of  final  payment  when  made 
shall  forthwith  be  reported  in  writing  by  the  cashier  or  secre- 
tary of  such  bank  to  the  superintendent  of  banks..  In  case  a 
loan  is  made  to  a  corporation  there  shall  be  reported  in  the 
same  manner  the  name  of  each  director  and  officer  of  such  bank 
who  is  a  member,  stockholder,  director,  officer  or  employee  of 
such  borrowing  corporation  and  the  amount  of  stock  held  by 
him  in  such  borrowing  corporation.  All  the  provisions  of  this 
section  relating  to  reports  shall  apply  to  the  granting  of  credit 
and  all  loans  made  under  any  credit  given  and  payments  made 
thereon  shall  also  be  reported  immediately  after  the  same  are 
made.  In  case  of  a  loan  made  without  the  previous  authoriza- 
tion of  the  directors,  the  fact  of  making  such  loan  shall  forth- 
with be  reported  and  the  action  of  the  board  of  directors,  in 
confirming  or  refusing  to  confirm  such  loan  within  thirty  days 
thereafter,  and  the  fact  of  final  payment  when  made  shall  be 
reported  in  the  same  manner  as  herein  required  for  loans  made 
under  previous  authorization.  Any  officer,  director,  agent,  or 
employee  of  a  commercial  bank,  who  knowingly  procures  a  loan 
from  such  commercial  bank  contrary  to  the  provisions  of  this 
section,  shall  be  guilty  of  a  felony.  In  case  of  the  neglect  or 
failure  of  the  secretary  or  cashier  of  any  such  bank,  to  report 
to  the  superintendent  of  banks,  as  herein  provided,  any  of  the 
facts  so  required  to  be  reported,  the  bank  shall  be  liable  there- 
for and  shall  forfeit  to  the  people  of  the  State  of  California 
twenty-five  dollars  per  day  for  each  day,  or  part  thereof, 
during  which  such  neglect  or  failure  continues. 

This  section  shall  not  apply  to  any  loan  made  to  a  religious 
corporation,  club,  or  other  membership  corporation  of  which 
one  or  more  directors,  officers,  agents  or  employees  of  such 
commercial  bank  may  be  members  or  officers  but  in  which  they 
have  no  financial  interest. 


CALIFORNIA   BANK   ACT  71 

Sec.  84.  No  commercial  bank  shall  invest  an  amount  ex- 
ceeding its  paid-up  capital  and  surplus  in  the  lot  and  building 
in  which  the  business  of  the  bank  is  carried  on,  furniture  and 
fixtures,  vaults  and  safe  deposit  vaults  and  boxes  necessary 
or  proper  to  carry  on  its  banking  business ;  and  hereafter  the 
authority  of  a  two-thirds  vote  of  all  the  directors  shall  be 
necessary  to  authorize  the  purchase  of  such  lot  and  building 
or  the  construction  of  such  building. 

Sec.  85.  The  superintendent  of  banks  shall  have  power  to 
limit  the  amount  of  funds  that  may  be  deposited  by  any  com- 
mercial bank  with  any  other  commercial  bank. 


ARTICLE  IV. 

TRUST  COMPANIES. 

Sec.  90.  Any  corporation  which  has  been  or  shall  be 
incorporated  under  the  general  corporation  laws  of  this  state, 
which  is  authorized  by  its  articles  of  incorporation  to  act 
as  executor,  administrator,  guardian  of  estates,  assignee, 
receiver,  depositary  or  trustee,  under  appointment  of  any 
court  or  by  authority  of  any  law  of  this  state,  or  as  trustee  for 
any  purpose  permitted  by  law,  which  has  its  principal  place 
of  business  in  a  city  in  which  the  population  does  not  exceed 
one  hundred  thousand  persons  and  which  has  a  capital  of  not 
less  than  one  hundred  thousand  dollars  actually  paid  in,  in 
cash,  assigned  to  or  available  for  the  purpose  of  conducting 
business  in  any  such  capacity,  or  trust  business  of  any  charac- 
ter permitted  by  law,  and  which  has  made  with  the  state 
treasurer  the  deposit  of  money  or  securities  of  the  character 
and  in  the  amount  required  by  the  terms  of  section  ninety-six 
of  this  act,  and  which  has  received  from  the  superintendent  of 
banks  the  certificate  of  authority  required  by  the  terms  of 
section  one  hundred  and  twenty-seven  of  this  act,  to  transact 
such  business,  and  any  corporation  which  has  been  or  shall  be 
incorporated  under  the  general  corporation  laws  of  this  state, 
which  is  authorized  by  its  articles  of  incorporation  to  act  as 


72  CALIFORNIA   BANK   ACT 

executor,  administrator,  guardian  of  estates,  assignee,  receiver, 
depositary  or  trustee,  under  appointment  of  any  court  or  by 
authority  of  any  law  of  this  state,  or  as  trustee  for  any  purpose 
permitted  by  law,  which  has  its  principal  place  of  business  in 
a  city  in  which  the  population  exceeds  one  hundred  thousand 
persons  and  which  has  a  capital  of  at  least  two  hundred  thou- 
sand dollars  actually  paid  in,  in  cash,  assigned  to  or  available 
for  the  purpose  of  conducting  business  in  any  such  capacity, 
or  trust  business  of  any  character  permitted  by  law,  and  which 
has  made  with  the  state  treasurer  the  deposit  of  money  or 
securities  of  the  character  and  in  the  amount  required  by  the 
terms  of  section  ninety-six  of  this  act,  and  which  has  received 
from  the  superintendent  of  banks  the  certificate  of  authority 
required  by  the  terms  of  section  one  hundred  twenty-seven 
of  this  act,  to  transact  such  business,  may  act,  or  may  be 
appointed  by  any  court  to  act,  in  any  such  capacity  in  like 
manner  as  an  individual  and  when  so  qualified  shall  be  known 
as  a  trust  company.  Any  such  trust  company  may,  as  pro- 
vided in  this  act,  accept  or  receive  any  deposit  of  money  or 
personal  property  authorized,  directed  or  permitted  to  be  made 
with  any  such  corporation  by  any  court  or  law  of  this  state, 
and  may  accept  and  execute  any  trust  provided  for  in  this 
act,  or  permitted  by  any  law  of  this  state,  to  be  taken,  accepted 
or  executed  by  an  individual.  Any  such  trust  company,  if 
located  in  a  city  the  population  of  which  does  not  exceed  one 
hundred  thousand  persons  must  segregate  that  portion  of  its 
capital  and  surplus  assigned  to  or  available  for  its  trust  busi- 
ness and  must  apportion  and  set  aside  at  least  fifty  thousand 
dollars  of  such  paid-up  capital  as  security  for  the  faithful 
performance  and  execution  of  all  private  trusts  accepted  by  it 
and  must  also  apportion  and  set  aside  at  least  fifty  thousand 
dollars  of  such  paid-up  capital  as  security  for  the  faithful  per- 
formance and  execution  of  all  court  trusts  accepted  by  it  and 
whenever  such  trust  company  shall,  under  the  provisions  of 
sections  ninety-six  and  ninety-eight  of  this  act,  be  required  to 
make  the  first  additional  deposit  of  securities  with  the  state 
treasurer,  such  trust  company  must  also  apportion  and  set 
aside  an  additional  fifty  thousand  dollars  of  paid-up  capital  as 
security  for  the  faithful  performance  and  execution  of  all  pri- 


CALIFORNIA   BANK   ACT  73 

vate  trusts  accepted  by  it  and  must  also  apportion  and  set  aside 
an  additional  fifty  thousand  dollars  of  paid-up  capital  as  secur- 
ity for  the  faithful  performance  and  execution  of  all  court 
trusts  accepted  by  it,  and  any  trust  company,  if  located  in  a 
city,  the  population  of  which  exceeds  one  hundred  thousand 
persons,  must  segregate  that  portion  of  its  capital  and  surplus 
assigned  to  or  available  for  its  trust  business  and  must  appor- 
tion and  set  aside  at  least  one  hundred  thousand  dollars  of  such 
paid-up  capital  as  security  for  the  faithful  performance  and 
execution  of  all  private  trusts  accepted  by  it  and  must  also  ap- 
portion and  set  aside  at  least  one  hundred  thousand  dollars  of 
such  paid-up  capital  as  security  for  the  faithful  performance 
and  execution  of  all  court  trusts  accepted  by  it ;  provided,  that 
no  such  trust  company  shall  at  any  time  be  required  to  appor- 
tion and  set  aside  any  portion  of  its  surplus  as  security  for  the 
faithful  performance  of  such  private  trusts,  nor  shall  it  be  pro- 
hibited from  so  doing ;  and  provided,  further,  that  the  respect- 
ive amounts  of  capital  or  capital  and  surplus  so  apportioned 
and  set  aside  shall  be  treated  in  all  respects  as  the  separate  cap- 
ital or  capital  and  surplus  of  each  respective  kind  or  class  of 
business,  as  though  the  same  were  conducted  by  separate  and 
distinct  corporations,  and  each  shall  be  kept,  held,  used  and 
disposed  of  wholly  for  the  exclusive  benefit,  protection  and 
security  of  the  respective  classes  of  trust  business  to  which 
the  same  were  respectively  so  apportioned  and  set  aside.  In 
all  cases  in  which  it  is  required  that  an  executor,  administra- 
tor, guardian  of  estates,  assignee,  receiver,  depositary  or 
trustee,  shall  qualify  by  taking  and  subscribing  an  oath,  or  in 
which  an  affidavit  is  required,  it  shall  be  sufficient  qualification 
by  such  corporation  if  such  oath  be  taken  and  subscribed  or 
such  affidavit  made  by  the  president,  vice  president,  secretary, 
manager,  trust  officer,  assistant  trust  officer  or  regularly  em- 
ployed attorney  thereof,  and  such  officer  or  employee  shall  be 
liable  for  the  failure  of  such  trust  company  to  perform  any 
of  the  duties  required  by  law  to  be  performed  by  an  individual 
acting  in  like  capacity  and  subject  to  like  penalties;  provided, 
any  such  appointment  as  guardian  shall  apply  to  the  estate 
only,  and  not  to  the  person.  No  foreign  corporation  shall  have 
or  exercise  in  this  state  the  power  to  act  as  trustee  under  any 


74  CALIFORNIA   BANK   ACT 

mortgage,  deed  of  trust,  or  other  instrument  securing  notes  or 
bonds  issued  by  any  corporation,  excepting  that  a  foreign  cor- 
poration may  be  authorized  to  act,  outside  of  the  State  of 
California,  as  co-trustee  with  any  qualified  trust  company 
organized  and  doing  business  under  the  laws  of  this  state,  for 
the  following  purposes  with  reference  to  bonds  secured  by 
mortgage  or  deed  of  trust  of  property  in  this  state,  and  none 
other : 

(1)  To  deliver  bonds,  and  receive  payment  therefor. 

(2)  To  deliver  permanent  bonds  in  exchange  for  temporary 
bonds  of  the  same  issue. 

(3)  To  deliver  refunding  bonds  in  exchange  for  those  of  a 
prior  issue  or  issues. 

(4)  To  register  bonds,  or  to  exchange  registered  bonds  for 
coupon  bonds,  or  coupon  bonds  for  registered  bonds. 

(5)  To  pay  interest  on  such  bonds,  and  to  take  up  and  can- 
cel coupons  representing  such  interest  payments. 

(6)  To  redeem  and  cancel  bonds  when  called  for  redemp- 
tion, or  to  pay  and  cancel  bonds  when  due. 

(7)  The  certification  of  registered  bonds  for  the  purpose 
of  exchanging  registered  bonds  for  coupon  bonds. 

Sec.  91.  Any  court  having  jurisdiction  of  any  executor, 
administrator,  guardian,  assignee,  receiver,  depositary  or 
trustee,  upon  the  application  of  any  such  officer  or  trustee,  or 
upon  the  application  of  any  person  having  an  interest  in  the 
estate  or  property  administered  by  such  officer  or  trustee,  after 
such  notice  to  the  other  parties  in  interest  as  the  court  may 
direct,  and  after  a  hearing  upon  such  application,  may  author- 
ize such  officer  or  trustee  to  deposit  any  moneys  then  in  his 
hands,  or  which  may  come  into  his  hands  thereafter,  until  the 
further  order  of  said  court,  with  any  such  trust  company,  and 
upon  deposit  of  such  money,  and  its  receipt  and  acceptance  by 
such  trust  company,  the  said  officer  or  trustee  shall  be  dis- 
charged from  further  care  or  responsibility  therefor.  Such 
deposit  shall  be  paid  out  only  upon  the  order  of  said  court. 

Sec.  92.  Any  public  administrator  may  deposit  any  or  all 
moneys  of  any  estate  upon  which  he  is  administering,  not 


CALIFORNIA   BANK   ACT  75 

required  for  the  current  expenses  of  such  administration,  with 
any  such  trust  company  having  its  principal  place  of  business 
in  the  county,  or  city  and  county  in  which  he  is  acting  as  such 
administrator.  Any  court  having  jurisdiction  of  an  estate 
being  administered  by  a  public  administrator,  may  direct  such 
administrator  to  deposit  all  or  any  part  of  the  moneys  of  said 
estate  with  any  such  trust  company.  Such  deposit  shall  relieve 
the  public  administrator  from  depositing  with  the  county 
treasurer  the  moneys  so  deposited  with  such  trust  company. 
Moneys  so  deposited  by  a  public  administrator  may  be  drawn, 
upon  the  order  of  such  administrator,  countersigned  by  a  judge 
of  the  superior  court,  when  required  for  the  purposes  of 
administration,  or  otherwise. 

Sec.  93.  Any  court  having  jurisdiction  of  any  estate  in 
process  of  administration,  or  any  other  proceeding,  may,  on 
application  of  any  person  interested  therein,  or  the  person 
who  has  been  selected  by  said  court,  or  a  judge  thereof  as 
executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
tary or  trustee,  after  such  notice  to  the  parties  in  interest 
as  the  court  shall  direct,  or  without  notice  if  all  parties  in 
interest  consent  thereto,  and  a  hearing  on  such  application, 
order  any  executor,  administrator,  guardian,  assignee,  re- 
ceiver, depositary  or  trustee  so  selected  or  appointed,  whether 
such  person  has  duly  qualified  or  not  to  deposit  with  any  such 
trust  company,  for  safe-keeping,  such  portion  or  all  of  the 
personal  assets  of  said  estate  as  the  court  shall  deem  proper, 
and  upon  such  deposit  being  made,  the  court  shall  by  an  order 
of  record  reduce  the  bond  to  be  given  or  theretofore  given  by 
such  officer  or  trustee,  so  as  to  cover  only  the  estate  remaining 
in  the  hands  of  said  officer  or  trustee;  and  the  property  so 
deposited  shall  thereupon  be  held  by  such  trust  company, 
under  the  order  and  direction  of  said  court. 

Sec.  94.  Such  trust  company  shall  not  be  required  to  give 
any  bond  or  security  in  case  of  any  appointment  or  deposit 
of  moneys  or  other  personal  assets  hereinbefore  provided  for, 
except  as  provided  in  this  act,  but  shall  be  responsible  for  all 
investments  which  shall  be  made  by  it  of  the  funds  which  may 


76  CALIFORNIA   BANK   ACT 

be  entrusted  to  it  for  investment  by  such  court,  and  shall  be 
liable  to  the  same  extent  as  an  individual,  and  as  hereinafter 
provided. 

Sec.  95.  Such  trust  company  shall  pay  interest  upon  all 
moneys  so  deposited  with  it  at  such  rate  as  may  be  agreed 
upon  at  the  time  of  its  acceptance  of  any  such  deposit,  or  as 
shall  be  provided  by  the  order  of  court  and  agreed  to  by  such 
trust  company. 

Sec.  96.  Any  such  trust  company,  if  its  principal  place  of 
business  is  situated  in  a  city  the  population  of  which  does  not 
exceed  one  hundred  thousand  persons,  before  accepting  any 
such  appointment  or  deposit,  shall  deposit  with  the  state 
treasurer,  as  herein  provided,  at  least  fifty  thousand  dollars 
as  security  for  the  faithful  performance  and  execution  of  all 
court  trusts  accepted  by  it,  and  shall  also  deposit  with  the 
state  treasurer  at  least  fifty  thousand  dollars  as  security  for 
the  faithful  performance  and  execution  of  all  private  trusts 
accepted  by  it;  and  whenever  any  such  trust  company  shall 
under  the  provisions  of  section  ninety-eight  of  this  act  be 
required  to  make  the  first  additional  deposit  of  securities  with 
the  state  treasurer  such  trust  company  must  also  deposit  with 
the  state  treasurer  an  additional  fifty  thousand  dollars  as 
security  for  the  faithful  performance  and  execution  of  all  pri- 
vate trusts  accepted  by  it ;  and  any  trust  company  if  its  prin- 
cipal place  of  business  is  situated  in  a  city  the  population  of 
which  exceeds  one  hundred  thousand  persons,  before  accepting 
any  such  appointment  or  deposit,  shall  deposit  with  the  state 
treasurer,  as  herein  provided  at  least  one  hundred  thousand 
dollars,  as  security  for  the  faithful  performance  and  execution 
of  all  court  trusts  accepted  by  it,  and  shall  also  deposit  with 
the  state  treasurer  at  least  one  hundred  thousand  dollars  as 
security  for  the  faithful  performance  and  execution  of  all 
private  trusts  accepted  by  it.  Any  such  deposit  may  be  made 
either  in  lawful  money  of  the  United  States,  or  in  securities  of 
either  or  any  of  the  following  classes : 

( a)    Bonds  issued  by  the  United  States  or  by  this  state  or  by 
any  county,  city  and  county,  city  or  school  district  of  this 


CALIFORNIA   BANK   ACT  77 

state,  or  bonds  of  any  irrigation  district  such  as  are  legal  for 
investment  by  savings  banks ; 

(b)  Bonds  for  the  payment  of  which  the  faith  and  credit 
of  the  United  States  or  of  this  state  are  pledged ; 

(c)  Notes  or  bonds  secured  by  mortgage  or  deed  of  trust 
constituting  a  first  lien  on  improved  and  productive  real  estate 
in  the  State  of  California;  such  improved  real  estate  being 
worth  at  least  double  the  amount  of  such  lien. 

(d)  Notes  or  bonds  secured  by  mortgage  or  deed  of  trust, 
payment  of  which  is  guaranteed  by  a  policy  of  mortgage  insur- 
ance, and  mortgage  participation  certificates,  issued  by  a  mort- 
gage insurance  company  in  accordance  with  the  provisions 
of  chapter  VIII  of  title  II  of  part  IV  of  division  first  of  the 
Civil  Code ;  provided,  that  such  notes  or  bonds  shall  constitute, 
and  such  mortgage  participation  certificates  shall  evidence  the 
ownership  of,  or  participation  in,  notes  or  bonds  which  consti- 
tute, a  first  lien  on  improved  and  productive  real  estate  in  the 
State  of  California,  such  improved  real  estate  being  worth  at 
least  double  the  amount  of  such  lien. 

Such  money  or  securities  shall  be  first  approved  by  the 
superintendent  of  banks  and,  upon  his  written  order,  deposited 
with  the  state  treasurer  for  the  respective  purposes  herein 
specified,  and  said  treasurer  shall  give  his  receipt  therefor, 
and  thereafter,  subject  to  the  provisions  of  this  act,  shall  hold 
such  deposits  of  money  or  securities  separately,  each  for  the 
sole  benefit  of  the  beneficiaries  of  the  class  of  trust  business, 
for  the  security  and  protection  of  which  the  same  was  de- 
posited, and  said  treasurer  shall  give  his  receipt  therefor  and 
the  state  shall  be  responsible  for  the  custody  and  safe  return 
of  any  money  or  securities  so  deposited.  Said  securities  or 
money  so  deposited  may  with  the  approval  of  the  superin- 
tendent of  banks,  be  withdrawn  or  exchanged  from  time  to 
time  for  other  like  securities,  or  lawful  money,  receivable  as 
aforesaid,  and  so  long  as  the  trust  company  so  depositing  said 
money  or  securities  shall  continue  solvent,  it  shall  have  the 
right  and  shall  be  permitted  by  the  state  treasurer  to  receive 
the  interest  and  dividends  on  any  securities  so  deposited. 
Said  securities  and  money  shall  be  subject  to  sale  and  transfer, 


78  CALIFORNIA   BANK   ACT 

and  to  the  disposal  of  the  proceeds  by  said  state  treasurer,  only 
on  the  order  of  a  court  of  competent  jurisdiction  and  for  the 
benefit  respectively  of  the  beneficiaries  of  that  class  of  trust 
business  for  the  security  and  protection  of  which  the  same  were 
deposited. 

Sec.  97.  Any  such  trust  company,  having  a  capital  and 
surplus  of  two  hundred  thousand  dollars  or  more  apportioned 
and  set  aside  as  security  for  the  faithful  performance  and 
execution  of  all  court  trusts  accepted  by  it,  as  provided  in  this 
act,  and  which  is  wholly  or  in  part  invested  in  the  lot  and 
building  in  which  its  business  is  carried  on,  may  be  permitted 
by  the  superintendent  of  banks  to  mortgage  such  lot  and 
building  to  the  state  treasurer  for  such  sum,  up  to  its  full 
market  value,  as  the  superintendent  of  banks  may  determine, 
and  such  mortgage  may  be  deposited  with  said  treasurer,  and 
when  so  deposited  it  shall  be  included  in  the  amount  of  securi- 
ties herein  required  to  be  deposited  with  said  treasurer  as 
security  for  the  faithful  performance  of  all  such  court  trusts. 

Sec.  98.  "Whenever  any  trust  company,  the  principal  place 
of  business  of  which  is  located  in  a  city  the  population  of  which 
does  not  exceed  one  hundred  thousand  persons,  receives  from 
court  trusts  accepted  by  it,  trust  funds,  as  herein  defined,  to 
the  amount  of  five  hundred  thousand  dollars,  it  shall  forthwith 
notify  in  writing  the  superintendent  of  banks  of  such  fact, 
and  within  thirty  days  thereafter  shall  deposit  with  the  state 
treasurer  additional  money  or  securities  of  the  character  men- 
tioned and  defined  in  section  ninety-six  of  this  act,  approved 
as  therein  provided,  in  the  amount  of  fifty  thousand  dollars; 
and  whenever  any  trust  company  receives  from  court  trusts 
such  funds  to  the  amount  of  one  million  dollars  it  shall  further 
notify  in  writing  the  superintendent  of  banks  of  such  fact 
and  within  thirty  days  thereafter  shall  deposit  with  the  state 
treasurer  additional  money  or  securities  of  the  character  men- 
tioned and  defined  in  section  ninety-six  of  this  act,  approved 
as  therein  provided,  in  the  amount  of  fifty  thousand  dollars; 
and  for  each  additional  five  hundred  thousand  dollars  of 
such  trust  funds  thereafter  received  by  any  trust  company 
from  court  trusts  a  similar  notification  in  writing  shall  forth- 


CALIFORNIA  BANK  ACT  79 

with  be  given  to  the  superintendent  of  banks,  and  a  further 
deposit  in  the  amount  of  twenty-five  thousand  dollars  of  such 
money  or  securities,  or  of  securities  provided  for  in  section 
ninety-seven  of  this  act  likewise  approved,  shall  be  made, 
within  thirty  days  thereafter,  by  such  trust  company  with 
said  state  treasurer,  until  five  hundred  thousand  dollars  of 
such  securities  have  been  so  deposited;  and  for  each  addi- 
tional one  million  dollars  of  such  trust  funds  thereafter 
received  by  any  trust  company  from  court  trusts  a  similar 
notification  in  writing  shall  forthwith  be  given  to  the  superin- 
tendent of  banks,  and  a  further  deposit  in  the  amount  of 
twenty-five  thousand  dollars  of  such  money  or  securities,  or  of 
securities  provided  for  in  section  ninety-seven  of  this  act  like- 
wise approved,  shall  be  made,  within  thirty  days  thereafter,  by 
such  trust  company  with  said  state  treasurer.  The  treas- 
urer shall  give  his  reecipt  for  any  money  or  securities  so  de- 
posited and  each  and  all  of  such  deposits  of  money  or  securi- 
ties, shall  be  held  by  said  state  treasurer  for  the  sole  benefit 
of  the  beneficiaries  of  the  class  of  business  for  the  security  and 
protection  of  which  same  were  deposited.  The  state  shall  be 
responsible  for  the  custody  and  safe  return  of  any  money  or 
securities  so  deposited  with  said  state  treasurer.  The  term 
"trust  funds"  when  used  in  this  section  shall  be  deemed  to 
mean  and  shall  mean  personal  property  and  cash,  whether 
received  with  the  original  trust  property  or  as  rent,  income 
or  proceeds  thereof,  or  otherwise,  in  connection  with  the  trust, 
and  shall  not  be  deemed  to  include  and  shall  not  include  real 
property.  Any  trust  company  failing  to  comply  with  the 
provisions  of  this  section  shall  forfeit  to  the  State  of  Cali- 
fornia one  hundred  dollars  a  day  for  each  day  during  which 
such  failure  or  default  shall  continue.  Upon  making  a  request 
in  writing  to  the  superintendent  of  banks,  any  such  trust 
company  shall  be  entitled  to  withdraw  from  the  state  treasurer, 
from  time  to  time,  a  sufficient  amount  of  such  securities  so 
that  at  all  times  the  amount  of  such  securities  so  deposited 
shall  conform  to  the  requirements  of  this  act,  and  so  that  at  no 
time  shall  such  trust  company  be  required  to  have  on  deposit 
with  the  state  treasurer  an  amount  of  securities  in  excess  of 


80  CALIFORNIA   BANK    ACT 

the  requirements  of  this  act.  Upon  receiving  such  request  in 
writing,  and  satisfactory  proof  of  the  facts  warranting  such 
withdrawal,  it  shall  be  the  duty  of  the  superintendent  of  banks 
to  forthwith  deliver  to  the  state  treasurer  a  written  order 
directing  the  withdrawal  of  said  securities  so  as  to  conform 
with  the  provisions  of  this  section,  and  it  shall  be  the  duty  of 
the  state  treasurer  to  comply  with  such  written  order.  The 
validity  or  legality  of  any  act  or  proceeding  done  or  taken  by 
any  such  trust  company,  relating  to  or  in  connection  with  the 
administration  of  any  such  trusts,  shall  not  be  affected  or  im- 
paired by  the  neglect  or  failure  of  such  trust  company,  or  of 
any  officer  or  employee  thereof,  to  comply  with  any  of  the 
*provisions  of  this  act,  but  all  such  acts  and  proceedings  done 
or  taken  prior  to  the  revocation  of  its  certificate  of  authority 
to  do  such  business  by  the  superintendent  of  banks,  under  the 
provisions  of  this  act,  or  the  revocation  by  any  court  or  judge 
thereof  of  the  appointment,  order  or  decree  theretofore  en- 
tered in  such  trust  matter  shall  be  as  valid  and  effective  for  all 
purposes  as  if  any  such  neglect  or  failure  had  not  occurred. 

Sec.  99.  When  any  part  of  the  securities  so  deposited  with 
the  state  treasurer  consists  of  notes,  bonds  or  participation 
certificates  secured  by  mortgage  or  deed  of  trust,  it  shall  be 
accompanied  by  a  policy  of  mortgage  insurance  or  a  complete 
abstract  of  title  or  an  unlimited  certificate  of  title  or  a  policy 
of  title  insurance  prepared  or  issued  by  a  person,  company 
or  corporation  designated  or  approved  by  the  superintendent 
of  banks  and  authorized  by  law  or  otherwise  found  by  the 
superintendent  of  banks  to  be  competent  to  issue  such  evidence 
of  title,  which  shall  be  examined  and  approved  by  or  under 
the  direction  of  said  superintendent  of  banks.  The  fees  for 
an  examination  of  such  policy  or  evidence  of  title  by  counsel 
to  be  paid  by  the  trust  company  making  the  deposit  shall  not 
exceed  twenty  dollars  for  each  policy  or  title  examined,  and 
the  fee  for  each  appraiser,  not  exceeding  two,  shall  not  exceed 
five  dollars  for  each  mortgage  or  deed  of  trust. 

(Sec.  100.    Eepealed  1913.) 

Sec.  101.  For  the  purposes  of  this  act,  all  trusts  permitted 
to  be  accepted  or  executed  by  any  such  trust  company,  under 


CALIFORNIA   BANK   ACT  81 

any  provision  of  this  act  are  hereby  classified  and  defined  as 
either : 

(a J  Court  trusts;  or 

( b)  Private  trusts. 

A  court  trust  is  one  in  which  any  such  trust  company  acts 
under  appointment,  order  or  decree  of  any  court,  as  executor, 
administrator,  guardian,  assignee,  receiver,  depositary  or 
trustee,  or  in  which  it  receives  on  deposit  from  a  public  admin- 
istrator, under  any  provision  of  this  act,  or  from  any  executor, 
administrator,  guardian,  assignee,  receiver,  depositary  or 
trustee,  under  any  order  or  decree  of  any  court,  money  or 
property. 

Any  other  trust  is  a  private  trust ;  provided,  that  the  creator 
of  any  private  trust  of  which  a  trust  company  shall  be  made, 
or  at  any  time  come  to  be,  the  trustee,  may,  at  the  time  of  the 
creation  of  such  trust,  or  the  creator  of  any  such  private  trust, 
or  his  successors  in  interest,  and  the  beneficiaries  thereof  may, 
at  any  time,  by  their  joint  consent,  direct  that  such  trust  shall 
be  subject  to  and  entitled  to  the  benefit  of  all  of  the  provisions 
of  this  act  relating  to  court  trusts  and  thereafter  such  trust 
shall  for  all  the  purposes  of  this  act  be  deemed  to  be  a  court 
trust  and  wherever  in  this  act  the  words  "court  trust"  are 
used  they  shall  be  deemed  to  include  private  trusts  which  are 
subject  to  supervision  except  in  so  far  as  any  of  the  provisions 
of  this  act  relating  to  court  trusts'*  may,  by  their  nature,  be 
inapplicable  to  such  private  trust.  Such  direction  shall  be 
in  writing  addressed  to  the  trustee  and  a  copy  thereof,  certified 
by  the  trustee,  delivered  to  the  superintendent  of  banks. 

In  case  such  direction  shall  be  made  after  the  acceptance  of 
the  trust,  the  trustee  shall  have  the  right  to  resign  as  such  and 
a  new  trustee  shall  be  appointed  as  provided  in  the  trust 
instrument  or  by  law.  The  inspection  and  supervision  of  the 
superintendent  of  banks  shall  extend  only  to  court  trusts  as 
herein  defined  and  to  private  trusts  subjected  to  the  provisions 
of  this  act  relating  to  court  trusts  as  above  provided. 

Private  trusts,  except  as  in  this  section  provided,  shall  not 
be  subject  to  the  inspection  or  supervision  of  the  superintend- 
ent of  banks,  his  attorneys,  examiners  or  other  assistants. 


82  CALIFORNIA  BANK   ACT 

In  making  the  reports  to  the  superintendent  of  banks 
required  by  this  act,  every  trust  company  shall,  in  addition 
to  the  other  facts  to  be  reported  by  it,  furnish  only  a  list  and 
brief  description  of  the  court  trusts  and  private  trusts,  which 
are  subject  to  supervision,  held  by  it,  the  source  of  appoint- 
ment thereto,  the  authority  by  which*  the  appointment  or 
deposit  was  made,  and  the  amount  of  real  or  personal  property 
held  by  such  trust  company  by  virtue  thereof. 

Nothing  in  this  act  contained  shall  make  it  unlawful  for  any 
person  or  corporation  not  subject  to  the  supervision  of  the 
superintendent  of  banks  to  engage  in  the  business  of  receiving 
and  holding  in  escrow  money  or  its  equivalent  pending  invest- 
ment in  real  estate  or  securities  for  or  on  account  of  his  or  its 
principal,  or  of  acting  as  trustee  under  deeds  of  trust  given 
solely  for  the  purpose  of  securing  obligations  for  the  repay- 
ment of  money,  other  than  corporation  bonds. 

Sec.  102.  Any  corporation  which  desires  to  withdraw  from 
and  discontinue  doing  a  trust  business  shall  furnish  to  the 
superintendent  of  banks  satisfactory  evidence  of  its  release 
and  discharge  from  all  the  obligations  and  trusts  hereinbefore 
provided  for,  and  thereupon  the  superintendent  of  banks  shall 
revoke  his  certificate  of  authority  to  do  a  trust  business  there- 
tofore issued  to  such  corporation,  and  the  state  treasurer  shall 
return  to  said  corporation  all  the  securities  deposited  by  such 
corporation  and  shall  cancel  any  mortgage  made  by  such 
corporation  to  said  state  treasurer  as  a  part  of  such  securities, 
and  thereafter  such  corporation  shall  not  be  permitted  to  use 
and  shall  not  use  the  word  "trust"  in  its  corporate  name  or 
in  connection  with  its  business. 

Sec.  103.  Any  trust  company  exercising  the  powers  and 
performing  the  duties  provided  for  in  this  act,  shall,  except 
as  herein  otherwise  provided,  keep  inviolate  all  communica- 
tions and  writings  made  to  or  by  said  trustee  touching  the 
existence,  condition,  management  and  administration  of  any 
private  trust  confided  to  it ;  and  no  creditor  or  stockholder  of 
any  such  trust  company  shall  be  entitled  to  disclosure  or 
knowledge  of  any  such  communication  or  writing;  provided, 
however,  that  the  president,  vice-president,  manager,  trust 


CALIFORNIA   BANK   ACT  83 

officer,  secretary  or  regularly  employed  attorney  of  any  such 
trust  company  shall  be  entitled  to  knowledge  of  any  such 
communication  or  writing ;  and  provided  further,  that  in  any 
suit  or  proceeding  touching  the  existence,  condition,  manage- 
ment or  administration  of  any  such  trust,  the  court  wherein 
the  same  is  pending  may  require  disclosure  of  any  such  com- 
munication or  writing. 

(Sec.  104.     Repealed  1913.) 

Sec.  105.  Every  trust  company  shall,  except  as  otherwise 
provided  by  law,  invest  its  capital  and  surplus  and  any  trust 
funds  received  by  it  in  connection  with  its  trust  business,  in 
accordance  with  the  laws  relative  to  the  investment  or  loan 
of  funds  deposited  with  savings  banks,  unless  a  specific  agree- 
ment to  the  contrary  is  made  between  the  trust  company  and 
the  party  creating  the  trust,  or  unless  it  is  otherwise  ordered 
by  the  court,  in  connection  with  any  court  trust. 

Sec.  106.  Any  such  trust  company  desiring  to  do,  or  doing, 
a  commercial  banking  business  or  a  savings  bank  business,  or 
both,  in  addition  to  its  trust  business  shall  have  actually  paid 
up,  in  cash,  the  amount  of  capital  provided  in  section  twenty- 
three  of  this  act. 

Any  title  insurance  company  authorized  by  its  articles  of 
incorporation  to  do,  or  doing  a  trust  business,  in  addition  to 
its  title  insurance  business,  shall  comply  with  all  the  require- 
ments of  any  law  governing  trust  companies,  and  shall  have 
a  capital  stock  actually  paid  in,  in  cash,  of  not  less  than  two 
hundred  thousand  dollars,  and  in  addition  thereto,  the  capital 
stock  required  by  law  for  doing  a  title  insurance  business. 
Such  capital  for  each  such  department  or  class  of  business 
shall  be  increased  from  time  to  time  in  the  same  manner  and 
to  the  same  extent  as  though  each  such  department  or  class 
of  business  was  conducted  by  a  separate  bank,  trust  company 
or  title  insurance  company,  instead  of  as  separate  departments 
or  classes  of  business.  Any  trust  company  and  any  title  insur- 
ance company  doing  a  departmental  business  as  above  pro- 
vided shall  comply  with  the  provisions  of  this  act  governing 
each  of  such  departments  and  with  the  provisions  of  any  law 


84  CALIFORNIA   BANK   ACT 

governing  each  such  class  of  business  as  to  its  deposits,  reserve, 
surplus,  investments  and  loans. 

Sec.  107.  Any  corporation  doing  a  departmental  business 
as  a  title  insurance  company  and  as  a  trust  company,  shall,  as 
to  its  trust  department,  be  subject  to  the  supervision  and 
inspection  of  the  superintendent  of  banks,  and  as  to  its  trust 
department  must  make  all  reports  to  the  superintendent  of 
banks  required  to  be  made  by  trust  companies  by  the  provi- 
sions of  this  act,  and  as  to  its  trust  department  such  corpora- 
tion shall  also  be  subject  to,  and  shall  have  the  benefit  of  all 
other  provisions  and  requirements  of  this  act  applicable  to 
trust  companies,  and  shall  also  be  subject  to  and  shall  have 
the  benefit  of  all  of  the  banking  laws  and  rules  and  regulations 
of  the  banking  department  of  this  state  applicable  to  trust 
companies.  The  proportionate  part  of  the  state  banking  fund 
provided  for  by  section  one  hundred  and  twenty-three  of  this 
act,  that  shall  be  payable  by  such  corporation,  shall  be  based 
on  the  amount  of  capital  and  surplus  of  such  corporation 
apportioned  to  its  trust  department. 


ARTICLE  V 

STATE  BANKING  DBPAETMENT.      . 

Sec.  120.  There  is  hereby  created  a  state  banking  depart- 
ment. The  chief  officer  of  such  department  shall  be  the 
superintendent  thereof,  and  be  known  as  the  superintendent 
of  banks.  He  shall  be  appointed  by  the  governor,  and  shall 
hold  office  at  the  pleasure  of  the  governor.  He  shall  not, 
either  directly  or  indirectly,  be  interested  in  any  commercial 
bank,  savings  bank  or  trust  company,  or  as  an  individual 
banker.  He  shall  receive  an  annual  salary  of  ten  thousand 
dollars,  to  be  ]5aid  monthly  out  of  the  state  treasury  on  a 
warrant  of  the  controller.  He  shall,  within  fifteen  days  from 
the  time  of  notice  of  his  appointment,  take  and  subscribe  to 
the  constitutional  oath  of  office,  and  file  the  same  in  the  office 
of  the  secretary  of  state,  and  execute  to  the  people  of  the  state 


CALIFORNIA   BANK   ACT  85 

a  bond  in  the  penal  sum  of  fifty  thousand  dollars,  with  cor- 
porate surety  or  two  or  more  sureties  to  be  approved  by  the 
governor  of  the  state,  conditioned  for  the  faithful  discharge 
of  the  duties  of  his  office. 

Sec.  121.  The  superintendent  of  banks  shall  employ  a 
chief  deputy,  attorney  and  such  examiners  and  other  assistants 
as  he  may  need  to  discharge  in  a  proper  manner  the  duties 
imposed  upon  him  by  law,  none  of  which  examiners  or  assist- 
ants or  attorney  shall  be  interested  in  any  bank  in  this  state 
as  director,  stockholder,  officer  or  employee,  and  they  shall 
perform  such  duties  as  he  shall  assign  to  them.  He  shall  fix 
the  compensation  of  the  chief  deputy,  attorney,  examiners  and 
other  assistants,  which  compensation  shall  be  paid  monthly  on 
his  certificate  and  on  the  warrant  of  the  controller  out  of  the 
state  treasury.  The  chief  deputy  shall  within  fifteen  days  from 
the  time  of  his  appointment  take  and  subscribe  to  the  consti- 
tutional oath  of  office  and  file  the  same  in  the  office  of  the  sec- 
retary of  state.  No  person  shall  be  appointed  a  chief  deputy 
who  has  not  had  at  least  three  years'  active  banking  experience, 
either  as  an  executive  officer  or  employee  of  some  bank  in  this 
state.  In  case  of  the  absence  or  inability  to  act,  or  vacancy  in 
the  office  of  the  superintendent  of  banks  for  thirty  consecutive 
days,  the  chief  deputy  shall  execute  to  the  people  of  the  state 
a  bond  in  the  penal  sum  of  fifty  thousand  dollars,  with  cor- 
porate surety  or  two  sureties  to  be  approved  by,  the  controller 
and  treasurer  of  the  state,  conditioned  for  the  faithful  dis- 
charge of  the  duties  of  the  superintendent  while  such  deputy 
acts  as  superintendent,  and  upon  filing  such  bond  such  deputy 
shall  have  all  the  power  and  duties  of  superintendent  of  banks, 
until  the  inability  of  the  superintendent  shall  be  removed,  or 
until  a  new  superintendent  of  banks  shall  have  been  appointed 
by  the  governor.  No  superintendent  of  banks,  chief  deputy,  or 
bank  examiner,  shall  be  or  shall  become  indebted,  directly  or 
indirectly,  either  as  borrower,  endorser,  surety,  or  guarantor,  to 
any  bank  under  his  supervision  or  subject  to  his  examination. 

Sec.  122.  The  superintendent  of  banks  shall  have  his  prin- 
cipal office  in  the  city  of  San  Francisco,  and  may  also  have 
suitable  rooms  in  the  city  of  Los  Angeles,  wherein  to  conduct 


86  CALIFORNIA   BANK   ACT 

the  business  of  the  state  banking  department.  The  superinten- 
dent shall,  from  time  to  time,  obtain  the  necessary  furniture, 
stationery,  fuel,  lights,  and  other  proper  conveniences  for  the 
transaction  of  such  business ;  the  expense  of  which  shall  be 
paid  out  of  the  state  treasury  on  the  certificate  of  the  superin- 
tendent and  the  warrant  of  the  controller. 

Sec.  123.  A  fund  is  hereby  created  to  be  known  as  the  state 
banking  fund,  and  out  of  said  fund  shall  be  paid  all  the  ex- 
penses incurred  in  and  about  the  conduct  of  the  business  of  the 
banking  department,  including  the  salary  of  the  superinten- 
dent, chief  deputy,  attorney,  examiners  and  other  assistants, 
traveling  expenses,  furnishing  of  rooms  and  rent.  Each  bank 
shall  pay  annually  its  share  of  eighty-seven  thousand  five  hun- 
dred dollars,  to  be  determined  by  the  proportion  which  the 
capital  and  surplus  which  shall  include  all  reserve  and  contin- 
gent funds,  of  any  incorporated  bank  or  the  surplus,  reserve 
and  contingent  funds  of  any  bank  organized  without  a  capital 
stock  bear  to  the  capita^  surplus,  reserve  and  contingent  funds 
in  the  aggregate  of  all  such  banks  receiving  certificates  of  au- 
thorization from  the  superintendent  of  banks,  as  shown  by  the 
last  report  of  such  bank  to  the  superintendent  of  banks.  All 
moneys  collected  or  received  by  the  superintendent  of  banks, 
under  and  by  virtue  of  the  provisions  of  this  act,  shall  be  by 
him  delivered  to  the  treasurer  of  the  state,  who  shall  deposit 
the  same  to  the  credit  of  said  banking  fund,  and  the  unex- 
pended balances  of  all  moneys  heretofore  paid  into  the  state 
treasury  by  any  of  the  bank  commissioners  or  the  superinten- 
dent of  banks,  shall  be  retained  and  become  a  part  of  said 
fund;  provided,  however,  that  the  superintendent  shall  have 
authority  to  retain  in  his  possession  and  under  his  control  the 
sum  of  five  hundred  dollars  to  be  used  by  him  as  a  revolving 
fund  for  the  benefit  of  the  state  banking  department  until  the 
end  of  the  fiscal  year  at  which  time  he  shall  make  full  settle- 
ment with  the  treasurer  of  the  state.  If  any  such  bank  shall 
fail  to  pay  such  charges  as  are  herein  required,  the  superinten- 
dent shall  forthwith  cancel  the  certificate  of  said  bank. 

Sec.  124.  Every  bank  and  the  trust  department  of  every  title 
insurance  company  doing  a  trust  business,  shall  be  subject  to 


CALIFORNIA   BANK   ACT  87 

the  inspection  of  the  superintendent  of  banks.  The  superinten- 
dent of  banks,  the  chief  deputy,  or  some  competent  person  or 
persons  to  be  appointed  by  the  superintendent  of  banks,  to  be 
known  as  examiners,  shall  visit  and  examine  every  bank  at 
least  once  each  fiscal  year.  On  every  such  examination  in- 
quiries shall  be  made  by  him  as  to  the  condition  and  resources 
of  the  bank,  the  mode  of  conducting  and  managing  its  affairs, 
the  action  of  its  directors,  the  investment  and  disposition  of 
its  funds,  the  safety  and  prudence  of  its  management,  the  se- 
curity afforded  to  those  by  whom  its  engagements  are  held  and 
whether  the  requirements  of  its  articles  of  incorporation  and 
the  law  have  been  complied  with  in  the  administration  of  its 
affairs,  and  as  to  such  other  matters  as  the  superintendent  may 
prescribe.  Whenever,  in  the  judgment  of  the  superintendent 
of  banks,  the  condition  of  any  bank  renders  it  necessary  or  ex- 
pedient to  make  an  extra  examination  or  to  devote  any  extraor- 
dinary attention  to  its  affairs  the  superintendent  of  banks  shall 
have  authority  to  make  any  and  all  necessary  extra  examina- 
tions and  to  devote  any  necessary  extra  attention  to  the  con- 
duct of  its  affairs ;  and  such  bank  shall  pay  for  all  such  extra 
services  rendered  by  the  superintendent  of  banks  at  a  price  to 
be  fixed  by  the  superintendent  of  banks  but  not  to  exceed 
twenty  dollars  per  day.  The  superintendent  of  banks  shall 
also  have  power  to  examine,  or  cause  to  be  examined,  every 
agency  located  in  this  state  of  any  foreign  bank  or  banking 
corporation,  for  the  purpose  of  ascertaining  whether  it  has 
complied  with  the  laws  of  this  state,  and  for  such  other  pur- 
poses and  as  to  such  other  matters  as  the  superintendent  may 
prescribe.  The  superintendent,  chief  deputy,  and  every  such 
examiner  shall  have  the  power  to  administer  an  oath  to  any 
person  whose  testimony  he  may  require  on  the  examination  of 
any  bank,  or  on  the  examination  of  any  agency  of  any  foreign 
bank  or  banking  corporation,  and  to  compel  appearance  and 
attendance  of  any  such  person  for  the  purpose  of  any  such 
examination.  When  a  bank  shall  have  been  examined  by  any 
examiner,  and  he  finds  securities  therein  which  are,  in  his 
judgment,  of  doubtful  value,  he  shall  report  the  same  to  the 
superintendent  of  banks,  who  thereupon  shall  be  authorized  to 


OO  CALIFORNIA   BANK   ACT 

employ  appraisers  at  the  expense  of  such  bank  to  appraise 
said  securities,  at  a  compensation  to  be  fixed  by  the  superin- 
tendent of  banks.  The  superintendent  of  banks  shall,  when- 
ever requested  to  do  so  by  any  bank,  provide  an  auditor  to 
make  an  audit  of  the  affairs  of  such  bank.  The  compensation 
for  making  such  audit  shall  be  paid  by  the  bank  direct  to  the 
person  making  the  audit.  Nothing  herein  shall  be  deemed  to 
authorize  or  require  the  superintendent  of  banks  to  inspect  or 
supervise  the  private  trust  business  or  title  insurance  business 
of  any  corporation  doing  a  trust  business. 

Sec.  125.  Every  examiner  appointed  by  the  superintendent 
of  banks  shall,  before  entering  upon  the  discharge  of  his  duties, 
take  the  constitutional  oath  of  office  and  cause  the  same  to  be 
filed  in  the  office  of  the  secretary  of  state.  No  such  examiner 
shall  be  appointed  receiver  of  any  bank  whose  books,  papers 
and  affairs  he  shall  have  examined  pursuant  to  his  appoint- 
ment. 

Sec.  126.  If  the  chief  deputy  or  any  examiner  shall m have 
knowledge  of  the  insolvency  or  unsafe  condition  of  any  bank 
mentioned  in  this  act,  and  that  it  is  unsafe  or  inexpedient  to 
permit  said  bank  to  continue  business,  and  shall  neglect  to 
forthwith  report  such  fact  in  writing  over  his  signature  to  the 
superintendent  of  banks,  he  shall  be  guilty  of  felony. 

Sec.  127.  When  any  number  of  persons  desire  to  organize 
a  corporation  to  conduct  any  one  or  more  or  all  of  the  busi- 
nesses mentioned  in  divisions  (a),  (b),  and  (c)  of  section  two 
of  this  act  or  to  circulate  stock  subscription  lists  for  any  such 
proposed  corporation  the  previous  written  consent  of  the  su- 
perintendent of  banks  to  such  proposed  organization  must  be 
obtained.  No  bank  shall  transact  any  business  in  this  state 
without  the  written  approval  of  the  superintendent  of  banks, 
and  without  his  written  certificate  stating  that  it  has  complied 
with  the  provisions  of  this  act,  and  all  the  requirements  of  law, 
and  that  it  is  authorized  to  transact,  within  this  state,  the  busi- 
ness specified  therein;  which  certificate  may  be  withheld  by 
the  superintendent  of  banks  whenever  he  has  reason  to  believe 
that  the  bank  is  being  formed  for  any  other  than  the  legitimate 
objects  contemplated  by  this  act,  or  whenever  he  has  reason  to 


CALIFORNIA   BANK   ACT  89 

believe  that  the  public  convenience  and  advantage  will  not  be 
promoted  by  the  opening  of  such  bank,  or  whenever  he  has 
reason  to  believe  that  the  corporate  name  assumed  by  such 
bank  resembles,  so  closely  as  to  be  likely  to  cause  confusion, 
the  name  of  any  other  bank  previously  formed  under  the  laws 
of  this  state.  Before  issuing  such  certificate  the  superintendent 
of  banks  shall  examine,  or  cause  an  examination  to  be  made,  in 
order  to  ascertain  whether  the  requisite  capital  of  such  bank 
has  been  paid  up  in  cash  or  the  requisite  reserve  or  surplus 
fund  has  been  accumulated.  The  superintendent  of  banks 
shall  not  authorize  such  bank  to  commence  business  until  it 
appears  from  such  examination,  or  other  evidence  satisfactory 
to  him,  that  the  requisite  capital  has  been,  in  good  faith,  sub- 
scribed and  paid  in,  in  cash,  or  that  the  requisite  surplus  or 
reserve  fund  has  been  accumulated  or  paid  in,  in  cash,  and 
until  said  bank  shall  have  paid  a  fee  of  fifty  dollars  for  each 
department  to  be  operated  by  said  bank. 

Sec.  128.  When  the  certified  copy  of  articles  of  incorpora- 
tion of  any  bank  shall  have  been  filed  with  the  secretary  of 
state,  and  application  made  for  the  issuance  of  a  certificate  to 
do  business  as  a  bank,  the  superintendent  of  banks,  provided 
he  has  not  withheld  granting  his  certificate  for  any  of  the  rea- 
sons set  forth  in  section  one  hundred  twenty-seven  hereof, 
shall  ascertain,  from  the  best  sources  of  information  at  his 
command,  whether  the  character  and  general  fitness  of  the  per- 
sons named  as  stockholders  are  such  as  to  command  the  confi- 
dence of  the  community  in  which  such  bank  is  proposed  to  be 
located,  and,  if  so  satisfied,  he  shall,  within  sixty  days  after 
such  application  has  been  made  to  him,  issue,  under  his  hand 
and  official  seal,  the  certificate  of  authorization  required  by 
this  act.  The  superintendent  of  banks  shall  transmit  a  dupli- 
cate of  such  certificate  of  authorization  to  the  county  clerk  of 
the  county  in  which  the  principal  place  of  business  of  such 
bank  is  located,  and  he  shall  file  the  same  in  his  office.  The 
superintendent  of  banks  shall  also  file  a  duplicate  of  such  cer- 
tificate in  his  own  office. 

Sec.  129.  Every  bank  doing  a  departmental  business  shall 
render  to  the  superintendent  of  banks  for  each  department 


90  CALIFORNIA   BANK   ACT 

conducted  by  it,  a  separate  report  showing  in  detail  as  required 
by  section  one  hundred  thirty  of  this  act,  the  actual  financial 
condition  of  such  department  and  shall  at  the  time  of  furnish- 
ing said  report  separately  publish  the  statement  for  each  de- 
partment as  provided  in  section  one  hundred  thirty-two  of 
this  act. 

Sec.  130.  Every  bank,  organized  under  the  laws  of  this 
state,  shall,  whenever  required  by  the  superintendent  of  banks, 
make  a  report  in  writing  to  him,  verified  by  the  oath  of  its 
president  and  its  secretary  or  cashier,  or  two  principal  officers. 
Such  reports  shall  show  the  actual  financial  condition  of  the 
bank  making  the  report,  at  the  close  of  any  past  day  designated 
by  the  superintendent,  and  shall  specify  the  following : 

1.  The  amount  of  its  capital  stock  and  the  number  of  shares 
into  which  it  is  divided. 

2.  The  names  of  the  directors  and  the  number  of  shares  of 
stock  held  by  each. 

3.  The  total  amount  of  capital  actually  paid  in,  in  cash,  and 
the  total  amount  of  surplus,  reserve  and  any  other  funds. 

4.  The  total  amount  due  the  depositors. 

5.  The  total  amount  and  character  of  any  other  liabilities  it 
may  have. 

6.  The  amount  at  which  the  lot  and  building  occupied  by 
the  bank  for  the  transaction  of  its  regular  business  stands 
debited  on  its  books;  also  the  market  value  of  all  other  real 
estate  held,  whether  acquired  in  settlement  of  loans  or  other- 
wise, the  original  cost  to  the  bank,  the  date  when  acquired,  the 
amount  at  which  it  stands  debited  on  the  bank  books,  in  what 
counties  situated,  and  in  what  name  the  title  is  vested,  if  not 
in  the  name  of  the  bank  itself. 

7.  The  amount  loaned  on  real  estate,  specifying  the  amount 
secured  on  real  estate  in  each  county  separately ;  also  specify- 
ing the  name  of  the  person  in  whose  name  the  property  is  held 
in  trust  or  as  security,  in  case  it  is  held  in  any  name  other  than 
that  of  the  bank  and  the  instrument  creating  the  security  does 
not  itself  disclose  the  name  of  the  bank. 

8.  The  amount  invested  in  bonds,  designating  the  name  and 
amount  of  each  particular  kind. 


CALIFORNIA  BANK  ACT  91 

9.  The  amount  loaned  on  stocks  and  bonds,  designating  each 
particular  class  and  the  amount  thereof. 

10.  The  amount  of  money  loaned  on  other  securities,  with  a 
particular  designation  of  each  class  and  the  amount  loaned 
on  each. 

11.  The  amount  and  kind  of  money  on  hand  or  deposited  in 
any  other  bank  or  place,  with  the  name  of  the  place  where  de- 
posited and  the  amount  in  each  place. 

12.  Any  other  property  held,  or  any  amount  of  money 
loaned,  deposited,  invested  or  placed,  not  otherwise  herein 
enumerated,  and  the  place  where  situate  and  the  value  of  said 
property,  and  the  amount  so  loaned,  deposited  or  placed. 

13.  The  date  on  which  examination  of  the  bank  was  last 
made  by  its  board  of  directors  and  the  date  on  which  report  of 
such  examination  was  filed,  as  required  by  section  one  hundred 
thirty-nine  of  this  act. 

14.  The  outstanding  and  unpaid  amounts  of  any  loans  made 
by  the  bank,  which  under  the  provisions  of  either  section  sixty- 
five  or  eighty-three  of  this  act  are  required  to  be  reported  to 
the  superintendent  of  banks. 

15.  Any  overdrafts  and  any  loans,  investments,  acts  or 
omissions  violative  of  or  not  in  conformity  with  any  provision 
of  this  act  which  may  be  specifically  called  for. 

Every  foreign  corporation  transacting  the  business  of  bank- 
ing in  this  state  shall  make  the  report  herein  required  as  far 
as  such  report  may  relate  to  the  affairs  of  such  corporation  in 
this  state,  and  every  foreign  corporation  must  particularly 
render  the  report  required  by  subdivisions  three,  four,  five, 
six,  seven,  eight,  nine,  ten,  eleven,  twelve,  thirteen,  fourteen, 
and  fifteen  of  this  section.  Such  report  shall  be  made  in  writ- 
ing and  verified  by  the  oath  of  one  of  its  duly  authorized 
officers  or  managers  residing  in  this  state.  The  oaths  of  the 
officers  and  the  statements  above  required  shall  state  that  they 
and  each  of  them  have  a  personal  knowledge  of  the  matters 
therein  contained,  and  that  they  believe  every  allegation,  state- 
ment, matter,  and  thing  therein  contained  is  true.  Any  wilful 
false  statement  in  the  premises  shall  be  perjury  and  shall  be 
punished  as  such. 


92  CALIFORNIA   BANK   ACT 

Sec.  130a.  In  addition  to  the  information  obtained  from  the 
report  required  by  the  provisions  of  section  one  hundred  thirty 
of  this  act,  the  superintendent  of  banks  shall  also  have  the 
power  to  require  any  bank  to  furnish  a  special  report  in  writ- 
ing, verified  as  required  by  section  one  hundred  thirty  of  this 
act,  whenever  in  his  judgment  such  special  report  is  necessary 
to  inform  him  fully  of  the  actual  financial  condition  and  af- 
fairs of  such  bank.  Any  wilful  false  statement  in  the  premises 
shall  be  perjury  and  shall  be  punished  as  such. 

Sec.  131.  The  superintendent  of  banks  shall  call  for  the  re- 
ports specified  by  section  one  hundred  thirty  of  this  act  at  least 
three  times  each  year.  The  ' '  past  day  designated  by  the  super- 
intendent" of  banks  under  the  provisions  of  section  one  hun- 
dred thirty  of  this  act  shall  be  as  nearly  as  possible  the  day 
designated  by  the  comptroller  of  currency  of  the  United  States 
for  reports  of  national  banking  associations. 

Sec.  132.  At  the  time  of  furnishing  such  report  to  the  super- 
intendent of  banks,  every  bank  shall  also  publish  a  condensed 
statement  of  its  financial  condition,  at  least  once,  in  some  news- 
paper of  general  circulation,  published  in  the  city  or  town 
where  its  principal  place  of  business  is  located,  and,  if  no  paper 
is  published  in  such  town,  then  in  some  newspaper  of  general 
circulation  in  the  county  where  its  principal  place  of  business 
is  located.  Such  published  statement  shall  show  the  total 
amount  of  loans,  the  total  amount  of  overdrafts,  the  total 
amount  invested  in  bonds  and  other  securities,  the  total  amount 
due  from  banks,  the  total  amount  of  checks  and  other  cash 
items,  the  total  amount  of  cash  on  hand,  capital  paid  in,  surplus 
funds ;  undivided  profits,  less  expenses  and  taxes  paid ;  due  to 
other  banks  and  bankers,  due  to  trust  companies  and  savings 
banks;  individual  deposits  subject  to  checks;  demand  certifi- 
cates of  deposit;  time  deposits;  certified  checks;  cashier's 
checks  outstanding;  and  such  other  items  as  will  show  the 
actual  financial  condition  of  the  bank  making  the  report. 

Sec.  133.  "Whenever  it  shall  appear  from  the  report  of  any 
bank,  or  the  superintendent  of  banks  shall  have  reason  to  be- 
lieve that  the  capital  of  any  bank  is  impaired  or  reduced  below 


CALIFORNIA   BANK   ACT  93 

the  amount  required  by  law,  it  shall  be  the  duty  of  the  super- 
intendent of  banks  and  he  shall  have  the  power  to  examine 
said  bank  and  ascertain  the  facts,  and  in  case  he  finds  such 
impairment  or  reduction  of  capital,  he  shall  require  such  bank 
to  make  good  the  deficiency  so  appearing  within  sixty  days 
after  the  date  of  such  requisition.   The  directors  of  every  such 
bank,  upon  which  such  requisition  shall  have  been  made,  shall 
levy  an  assessment  upon  the  stock  thereof  to  repair  such  de- 
ficiency, and  shall  cause  notice  of  such  requisition  to  be  given 
to  each  stockholder  of  the  bank  and  of  the  amount  of  the  as- 
sessment which  he  must  pay  for  the  purpose  of  making  good 
such  deficiency,  by  a  written  or  printed  notice  mailed  to  such 
stockholder  at  his  last  known  address  or  served  personally 
upon  him.  If  any  stockholder  shall  refuse  or  neglect  to  pay  the 
assessment  specified  in  such  notice  within  thirty  days  from  the 
date  of  mailing  or  serving  such  notice  as  aforesaid,  the  direct- 
ors of  such  bank  shall  have  the  right  to  sell  to  the  highest  bid- 
der at  public  auction  the  stock  of  such  stockholder,  after  giving 
a  previous  notice  of  such  sale  for  ten  days  in  a  newspaper  of 
general  circulation  published  in  the  county  where  the  principal 
place  of  business  of  such  bank  is  located,  and  a  copy  of  such 
notice  of  sale  shall  also  be  served  on  the  owner  of  such  stock 
by  being  served  personally  on  him  or  by  mailing  to  his  last 
known  address  ten  days  before  the  day  fixed  for  such  sale ;   or 
such  stock  may  be  sold  at  private  sale  and  without  such  public 
notice ;    provided,  however,  that  before  making  such  private 
sale  thereof  an  offer  in  writing  shall  first  be  obtained  and  a 
copy  thereof  served  upon  the  owner  of  record  of  the  stock 
sought  to  be  sold,  either  personally  or  by  mailing  a  copy  of 
such  offer  to  his  last  known  address;   and  if,  after  service  of 
such  offer,  such  owner  shall  still  refuse  or  neglect  to  pay  such 
assessment  within  two  weeks  from  the  time  of  the  service  of 
such  offer,  the  said  directors  may  accept  such  offer  and  sell  such 
stock  to  the  person  making  such  offer,  or  to  any  other  person  or 
persons  making  a  larger  offer  than  the  amount  named  in  the 
offer  submitted  to  the  stockholder ;   but  such  stock  shall  in  no 
event  be  sold  for  a  smaller  sum  than  the  valuation  put  on  it 
by  the  superintendent  of  banks  in  his  determination  and  requi- 


94  CALIFORNIA   BANK   ACT 

sition  as  to  said  assessment,  nor  for  less  than  the  amount  of 
said  assessment  so  called  for  and  the  expense  of  sale.  Out  of 
the  avails  of  the  stock  so  sold,  the  directors  shall  pay  the 
amount  of  assessment  levied  thereon,  and  the  necessary  costs 
of  sale,  and  the  balance,  if  any,  shall  be  paid  to  the  person  or 
persons  whose  stock  has  thus  been  sold.  A  sale  of  stock  as 
herein  provided  shall  effect  an  absolute  cancellation  of  the  out- 
standing certificate  or  certificates  evidencing  the  stock  so  sold, 
and  shall  make  the  same  null  and  void,  and  a  new  certificate 
shall  be  issued  by  the  bank  to  the  purchaser  thereof. 

Sec.  134.  If  it  shall  appear  to  the  superintendent  of  banks 
that  any  bank  has  violated  or  failed  to  comply  with  the  pro- 
visions of  its  articles  of  incorporation,  or  any  law  of  this  state, 
he  may,  by  an  order  under  his  hand  and  official  seal,  which  seal 
must  be  adopted  by  him,  addressed  to  such  bank,  direct  such 
bank  to  discontinue  such  violation  and  to  comply  with  the  law ; 
or,  if  it  shall  appear  to  the  superintendent  of  banks  that  such 
bank  is  conducting  business  in  an  unsafe  or  injurious  manner, 
he  may,  in  like  manner  direct  the  discontinuance  of  any  such 
unsafe  or  injurious  practices.  Such  order  shall  require  such 
bank  to  show  cause,  before  the  superintendent  of  banks,  at  a 
time  and  place  to  be  fixed  by  him,  why  said  order  should  not 
be  observed.  If  upon  such  hearing  it  shall  appear  to  the  super- 
intendent of  banks  that  such  bank  is  conducting  business  in  an 
unsafe  or  injurious  manner,  or  is  violating  or  failing  to  comply 
with  the  provisions  of  its  articles  of  incorporation,  or  any  law 
of  this  state,  then  the  superintendent  of  banks  shall  make  such 
order  final,  and  such  bank  shall  immediately  comply  with  such 
order  made  by  the  superintendent  of  banks.  Such  bank  shall 
have  ten  days  after  any  such  order  is  made  final  in  which  suit 
may  be  commenced  to  restrain  enforcement  of  such  order,  and 
unless  such  action  be  so  commenced  and  enforcement  of  said 
order  be  enjoined  within  ten  days,  by  the  court  in  which  such 
suit  is  brought,  then  such  bank  shall  comply  with  such  order. 

Sec.  135.  Whenever  the  superintendent  of  banks  shall  deem 
it  expedient  he  may  call  a  meeting  of  the  stockholders  of  any 
bank  organized  under  the  laws  of  this  state,  by  a  personal  no- 


CALIFORNIA   BANK   ACT  95 

tice  of  such  meeting  for  fifteen  days  previous  thereto.  All  nec- 
essary expense  incurred  in  the  serving  of  such  notice  shall  be 
borne  by  the  bank  whose  stockholders  are  required  to  convene. 

Sec.  135a.  If  the  capital  of  any  bank  shall  be  impaired,  or  if 
any  bank  shall  refuse  to  submit  its  books,  papers  and  concerns 
to  the  inspection  of  any  examiner,  or  if  any  officer  thereof 
shall  refuse  to  be  examined  upon  oath  touching  the  concerns  of 
such  bank,  or  if  such  bank  shall  violate  the  provisions  of  its 
articles  of  incorporation,  or  any  law  of  this  state,  or  if  such 
bank  shall  suspend  payment  of  its  obligations,  or  if  such  bank 
shall  conduct  its  business  in  an  unsafe  or  unauthorized  man- 
ner, or  if  from  any  examination  or  report  provided  for  by  this 
act  the  superintendent  of  banks  shall  conclude  that  such  bank 
is  in  an  unsound  or  unsafe  condition  to  transact  the  business 
for  which  it  is  organized,  or  that  it  is  unsafe  and  inexpedient 
for  it  to  continue  business,  an  action  to  procure  a  judgment 
dissolving  such  corporation  may  be  maintained  by  the  super- 
intendent of  banks. 

Sec.  136.  Whenever  it  shall  appear  to  the  superintendent  of 
banks  that  any  bank  has  violated  the  provisions  of  its  articles 
of  incorporation  or  any  law  of  this  state,  or  is  conducting  its 
business  in  an  unsafe  or  unauthorized  manner,  or  if  the  capital 
of  any  bank  is  impaired,  or  if  any  bank  shall  refuse  to  submit 
its  books,  papers  and  concerns  to  the  inspection  of  any  exam- 
iner, or  if  any  officer  thereof  shall  refuse  to  be  examined  upon 
oath  touching  the  concerns  of  any  such  bank  or  if  any  bank 
shall  suspend  payment  of  its  obligations,  or  if  from  any  ex- 
amination or  report  provided  for  by  this  act  the  superinten- 
dent of  banks  shall  have  reason  to  conclude  that  such  bank  is 
in  an  unsound  or  unsafe  condition  to  transact  the  business  for 
which  it  is  organized,  or  that  it  is  unsafe  and  inexpedient  for 
it  to  continue  business,  or  if  any  bank  shall  neglect  or  refuse 
to  observe  any  order  of  the  superintendent  of  banks  specified 
in  sections  one  hundred  thirty-three  or  one  hundred  thirty-four 
of  this  act,  the  superintendent  of  banks  may  forthwith  take 
possession  of  the  property  and  business  of  such  bank  and  re- 
tain such  possession  until  such  bank  shall  resume  business,  or 


96  CALIFORNIA   BANK   ACT 

its  affairs  be  finally  liquidated  as  herein  provided.  On  taking 
possession  of  the  property  and  business  of  any  such  bank  the 
superintendent  of  banks  shall  forthwith  give  notice  of  such 
fact  to  any  and  all  banks,  trust  companies,  associations  and 
individuals,  holding  or  in  possession  of  any  assets  of  such  bank. 
No  bank,  trust  company,  association  or  individual  knowing  of 
such  taking  possession  by  the  superintendent  of  banks,  or  noti- 
fied as  aforesaid,  shall  have  a  lien  or  charge  for  any  payment, 
advance  or  clearance  thereafter  made,  or  liability  thereafter 
incurred  against  any  of  the  assets  of  the  bank  of  whose  prop- 
erty and  business  the  superintendent  of  banks  shall  have  taken 
possession  as  aforesaid.  Such  bank  may,  with  the  consent  of 
the  superintendent  of  banks,  resume  business  upon  such  con- 
ditions as  may  be  approved  by  him.  Upon  taking  possession  of 
the  property  and  business  of  any  such  bank  the  superintendent 
of  banks  shall  have  authority  to  collect  moneys  due  to  such 
bank  and  do  such  other  acts  as  are  necessary  to  conserve  its 
assets  and  business,  and  shall  proceed  to  liquidate  the  affairs 
thereof  as  hereinafter  provided.  The  superintendent  of  banks 
shall  collect  all  debts  due  and  claims  belonging  to  it,  and  upon 
the  order  of  the  superior  court  may  sell  or  compound  any  bad 
or  doubtful  debts.  If  a  purchaser  for  any  bad  or  doubtful 
debts  can  not  be  obtained  and  it  appears  improbable  that  re- 
covery thereon  can  be  had  and  that  the  costs  of  actions  to  en- 
force collection  of  the  same  would  probably  be  lost,  the  court 
may  direct  that  suits  thereon  need  not  be  brought.  On  like 
order  he  may  sell  any  real  or  personal  property  of  such  bank 
on  such  terms  as  the  court  shall  direct ;  and  may,  if  necessary 
to  pay  the  debts  of  such  bank,  enforce  the  constitutional  indi- 
vidual liability  of  stockholders  by  action  to  be  brought  within 
three  years  after  the  date  of  his  taking  possession  of  the  af- 
fairs of  such  bank.  The  superintendent  of  banks  shall  deter- 
mine the  necessity  of  such  action  and  the  amount  necessary  to 
recover  from  the  stockholders  to  fully  pay  all  liabilities  of  such 
bank.  Such  action  may  be  in  equity  and  against  all  stock- 
holders upon  whom  service  of  process  in  the  State  of  Califor- 
nia can  be  had,  and  the  court  may  therein  determine  and  pro- 
vide for  any  equities  as  between  the  stockholders  including  the 


CALIFORNIA   BANK   ACT  97 

proportions  of  each  stockholder  to  any  surplus  of  money  or 
assets  that  may  remain  after  the  payment  of  all  liabilities  and 
the  expenses  of  liquidation.  The  superintendent  of  banks  may 
also  maintain  an  action  against  any  stockholder  residing  out 
of  the  state  or  upon  whom  service  of  process  can  not  be  had 
within  the  state,  in  any  court  of  the  United  States  or  of  any 
state  or  country.  Any  judgment  so  obtained  by  the  superin- 
tendent of  banks  against  such  or  any  of  such  stockholders 
which  is  of  doubtful  value  may  be  compromised  and  com- 
pounded by  the  superintendent  of  banks  on  such  terms  and 
conditions  as  the  superior  court  may  direct  or  authorize.  The 
superintendent  of  banks  shall  file  a  notice  of  pendency  of  ac- 
tion in  the  county  recorder's  office  of  the  county  where  such 
action  is  brought.  At  any  time  prior  to  the  trial  of  any  such 
action,  any  creditor  may  serve  upon  the  superintendent  of 
banks  and  file  with  the  court  wherein  such  action  is  pending, 
notice  that  he  elects  to  maintain  an  action  against  the  stock- 
holders or  any  of  them,  in  his  individual  capacity  and  there- 
upon the  amount  sued  for  in  such  action  shall  be  reduced  ac- 
cordingly and  such  creditor  shall  not  be  entitled  to  share  in 
the  proceeds  resulting  from  such  action  brought  by  the  superin- 
tendent of  banks.  For  the  purpose  of  executing  and  perform- 
ing any  of  the  powers  and  duties  hereby  conferred  upon  him, 
the  superintendent  of  banks  may,  in  the  name  of  the  delin- 
quent bank  or  in  his  own  name,  prosecute  and  defend  any  and 
all  suits  and  other  legal  proceedings  and  may,  in  the  name  of 
the  delinquent  bank  or  in  his  own  name  as  trustee  execute,  ac- 
knowledge and  deliver  any  and  all  deeds,  assignments,  releases 
and  other  instruments  necessary  and  proper  to  effectuate  any 
sale  of  real  or  personal  property  or  sale  or  compromise  or  com- 
pound authorized  by  order  of  the  court  as  herein  provided; 
and  any  deed  or  other  instrument,  executed  pursuant  to  the 
authority  hereby  given,  shall  be  valid  and  effectual  for  all  pur- 
poses, as  though  the  same  had  been  executed  by  the  officers  of 
the  delinquent  bank  by  authority  of  its  board  of  directors.  In 
case  any  of  the  real  property  so  sold  is  located  in  a  county 
other  than  the  county  in  which  the  application  to  the  court  for 
leave  to  sell  the  same  is  made,  the  superintendent  of  banks  shall 


yo  CALIFORNIA   BANK   ACT 

cause  a  certified  copy  of  the  order  authorizing  or  ratifying 
such  sale  to  be  filed  in  the  office  of  the  recorder  of  the  county 
in  which  the  said  real  property  is  located.  The  superintendent 
of  banks  may,  under  his  hand  and  official  seal,  appoint  one  or 
more  special  deputy  superintendents  of  banks,  as  agent  or 
agents,  with  the  powers  specified  in  the  certificate  of  appoint- 
ment hereinafter  mentioned,  to  assist  him  in  the  duty  of  liqui- 
dation and  distribution,  the  certificate  of  appointment  to  be 
filed  in  the  office  of  the  superintendent  of  banks,  and  a  certified 
copy  in  the  office  of  the  clerk  of  the  county  in  which  the  prin- 
cipal office  of  such  bank  is  located. 

The  superintendent  of  banks  may  from  time  to  time,  by  a 
certificate  of  appointment  under  his  hand  and  official  seal, 
specifying  the  powers  conferred,  authorize  a  special  deputy 
superintendent  to  perform  such  duties  connected  with  such 
liquidation  and  distribution  as  the  superintendent  of  banks 
may  deem  proper.  Such  certificate  of  appointment  shall  be 
filed  in  the  office  of  the  superintendent  of  banks  and  a  certi- 
fied copy  in  the  office  of  the  clerk  of  the  county  in  which  the 
principal  office  of  such  bank  is  located.  The  superintendent 
of  banks  may  employ  such  counsel  and  procure  such  expert 
assistance  and  advice  as  may  be  necessary  in  the  liquidation 
and  distribution  of  the  assets  of  such  bank,  and  for  that  pur- 
pose may  retain  such  of  the  officers  or  employees  of  such  bank 
as  he  may  deem  necessary.  The  superintendent  of  banks  shall 
require  from  a  special  deputy  superintendent  and  from  such 
assistants  such  security  for  the  faithful  discharge  of  their 
duties  as  he  may  deem  proper.  The  superintendent  of  banks 
shall  cause  notice  to  be  given  by  advertisement,  in  such  news- 
papers as  he  may  direct,  weekly  for  three  consecutive  months, 
calling  on  all  persons  who  may  have  claims  against  such  bank 
to  present  the  same  to  the  superintendent  of  banks,  and  make 
legal  proof  thereof  at  a  place  and  within  a  time,  not  earlier 
than  the  last  day  of  publication,  to  be  therein  specified.  The 
superintendent  of  banks  shall  mail  a  similar  notice  to  all  per- 
sons whose  names  appear  as  creditors  upon  the  books  of  the 
bank.  If  the  superintendent  of  banks  doubts  the  justice  and 
validity  of  any  claim,  he  may  reject  the  same,  and  serve  notice 


CALIFORNIA   BANK   ACT^  99 

of  such  rejection  upon  the  claimant,  either  by  mail  or  person- 
ally. An  affidavit  of  the  service  of  such  notice,  which  shall  be 
prima  facie  evidence  thereof  shall  be  filed  with  the  superinten- 
dent of  banks.   Any  action  upon  a  claim  so  rejected  must  be 
brought  within  six  months  after  such  service.    Claims  pre- 
sented after  the  expiration  of  the  time  fixed  in  the  notice 
to  creditors  shall  be  entitled  to  share  in  the  distribution  only  to 
the  extent  of  the  assets  in  the  hands  of  the  superintendent  of 
banks  equitably  applicable  thereto.    Upon  taking  possession 
of  the  property  and  assets  of  any  bank,  the  superintendent  of 
banks  shall  make  an  inventory  of  the  assets  of  such  bank  in 
duplicate,  one  to  be  filed  in  the  office  of  the  superintendent  of 
banks,  and  one  with  the  papers  in  said  proceeding  in  the  office 
of  the  clerk  of  the  county  in  which  the  principal  office  of  such 
bank  is  located ;  upon  the  expiration  of  the  time  fixed  for  the 
presentation  of  claims  the  superintendent  of  banks  shall  make 
in  duplicate  a  full  and  complete  list  of  the  claims  presented, 
including  and  specifying  such  claims  as  have  been  rejected  by 
him,  one  to  be  filed  in  the  office  of  the  superintendent  of  banks, 
and  one  with  the  papers  in  said  proceeding  in  the  office  of  the 
clerk  of  the  county  in  which  the  principal  office  of  such  bank  is 
located.    Thereafter  he  shall  make  and  file  in  said  offices  as 
above  provided  at  least  fifteen  days  before  each  application  to 
the  court  for  leave  to  declare  a  dividend  a  supplemental  list  of 
the  claims  presented  since  the  last  preceding  list  was  filed,  in- 
cluding and  specifying  such  claims  as  have  been  rejected  by 
him,  and  in  any  event  he  shall  make  and  file  as  above  provided 
such  a  list  at  least  once  every  six  months  after  the  filing  of  the  ■ 
original  list,  as  long  as  he  shall  remain  in  possession  of  the 
property  and  business  of  any  such  bank.   Such  inventory  and 
list  of  claims  shall  be  open  at  all  reasonable  times  to  inspection. 
The  compensation  of  the  special  deputy  superintendents,  coun- 
sel and  other  employees  and  assistants,  and  all  expenses  of 
supervision  and  liquidation,  shall  be  fixed  by  the  superinten- 
dent of  banks  and  shall  upon  the  certificate  of  the  superinten- 
dent of  banks  be  paid  out  of  the  funds  of  such  bank  in  the 
hands  of  the  superintendent  of  banks.  All  such  expenses  must 
be  reported  by  the  superintendent  of  banks  to  the  superior 


100  CALIFORNIA   BANK   ACT 

court  of  the  county  where  the  principal  place  of  business  of 
such  bank  is  located  and  settled  by  such  court  upon  notice  to 
such  bank.  The  moneys  collected  by  the  superintendent  of 
banks  shall  be  from  time  to  time  deposited  in  one  or  more  state 
banks  of  deposit,  savings  banks  or  trust  companies,  and,  in 
case  of  the  suspension  or  insolvency  of  the  depositary,  such  de- 
posits shall  be  preferred  before  all  other  deposits.  At  any  time 
after  the  expiration  of  the  date  fixed  for  the  presentation  of 
claims  the  superior  court  may  by  order  authorize  the  superin- 
tendent of  banks  to  declare  out  of  the  funds  remaining  in  his 
hands  after  the  payment  of  expenses  one  or  more  dividends, 
and  after  the  expiration  of  one  year  from  the  first  publication 
of  notice  to  creditors  he  may  declare  a  final  dividend,  such 
dividends  to  be  paid  to  such  persons,  and  in  such  amounts,  and 
upon  such  notice,  as  may  be  directed  by  the  superior  court  of 
the  county  in  which  the  principal  office  of  such  bank  is  lo- 
cated. Objections  to  any  claim  not  rejected  by  the  superinten- 
dent of  banks  may  be  made  by  any  party  interested  by  filing 
a  copy  of  such  objections  with  the  superintendent  of  banks, 
who  shall  present  the  same  to  the  superior  court  at  the  time 
of  the  next  application  to  declare  a  dividend.  The  court  to 
which  such  application  is  made  shall  thereupon  dispose  of  said 
objections  or  may  order  a  reference  for  that  purpose,  and 
should  the  objections  to  any  claim  be  sustained  by  the  court  or 
by  the  referee,  such  claim  shall  not  be  allowed  by  the  superin- 
tendent of  banks  until  the  claimant  shall  have  established  his 
claim  by  the  judgment  of  a  court  of  competent  jurisdiction. 
The  court  must  make  proper  provision  for  unproved  or  un- 
claimed deposits. 

Should  any  bank  at  the  time  the  superintendent  of  banks 
takes  possession  of  its  property  and  business,  have  in  its  pos- 
session, as  bailee  for  safekeeping  and  storage,  any  jewelry, 
plate,  money,  specie,  bullion,  stocks,  bonds,  securities,  valuable 
papers  or  other  valuable  personal  property  or  should  it  have 
rented  any  vaults,  safes  or  safe  deposit  boxes  or  any  portion 
thereof  for  the  storage  of  property  of  any  kind,  the  superin- 
tendent of  banks  may  at  any  time  thereafter  cause  to  be  mailed 
to  the  person  claiming  to  be  or  appearing  upon  its  books  to  be 


CALIFORNIA   BANK   ACT  101 

the  owner  of  such  property,  or  the  person  in  whose  name  the 
safe,  vault  or  box  stands,  a  notice  in  writing  in  a  securely 
closed,  postpaid  registered  letter,  directed  to  such  person  at 
his  post  office  address  as  recorded  upon  its  books,  notifying 
such  person  to  remove,  within  a  period  fixed  by  said  notice  and 
not  less  than  sixty  days  from  the  date  thereof,  all  such  personal 
property  and  upon  the  date  fixed  by  said  notice,  the  contract, 
if  any,  between  such  person  and  bank  for  the  storage  of  said 
property  or  for  the  use  of  the  said  safe,  vault  or  box  shall  cease 
and  determine,  and  the  amount  of  the  unearned  rent  or 
charges,  if  any,  paid  by  such  person  shall  become  a  debt  of  the 
bank  to  said  person.  If  the  property  be  not  removed  within  the 
time  fixed  by  the  notice,  the  superintendent  of  banks  may 
make  such  disposition  of  said  property  as  the  superior  court, 
upon  application  thereto,  shall  direct.  And  the  superintendent 
of  banks  may  cause  any  safe,  vault  or  box  to  be  opened  in  his 
presence  or  in  the  presence  of  one  of  the  special  deputy  super- 
intendents of  banks,  and  of  a  notary  public  not  an  officer  or  in 
the  employ  of  the  bank  or  of  the  superintendent  of  banks,  and 
the  contents  thereof,  if  any,  to  be  sealed  up  by  such  notary 
public  in  a  package  upon  which  such  notary  public  shall  dis- 
tinctly mark  the  name  and  address  of  the  person  in  whose 
name  such  safe,  vault  or  box  stands  upon  the  books  of  the  bank 
and  shall  attach  thereto  a  list  and  description  of  the  property 
therein;  and  the  package  so  sealed  and  addressed,  together 
with  the  list  and  description,  may  be  kept  by  the  superinten- 
dent of  banks  in  one  of  the  general  safes  or  boxes  of  the  bank 
until  delivered  to  the  person  whose  name  it  bears,  or  until 
otherwise  disposed  of  as  directed  by  the  court.  Whenever  any 
such  bank  of  whose  property  and  business  the  superintendent 
of  banks  has  taken  possession  as  aforesaid,  deems  itself  ag- 
grieved thereby,  it  may,  at  any  time  within  ten  days  after  such 
taking  possession,  apply  to  the  superior  court  in  the  county  in 
which  the  principal  office  of  such  bank  is  located  to  enjoin  fur- 
ther proceedings ;  and  said  court,  after  citing  the  superinten- 
dent of  banks  to  show  cause  why  further  proceedings  should 
not  be  enjoined,  and  hearing  the  allegations  and  proofs  of  the 
parties  and  determining  the  facts  may,  upon  the  merits,  dis- 


102  CALIFORNIA   BANK   ACT 

miss  such  application  or  enjoin  the  superintendent  of  banks 
from  further  proceedings,  and  direct  him  to  surrender  such 
business  and  property  to  such  bank.  An  appeal  as  above  pro- 
vided shall  operate  as  a  stay  of  the  judgment  of  the  superior 
court,  and  no  bond  need  be  given  if  the  appeal  be  taken  by  the 
superintendent  of  banks ;  but  if  the  appeal  be  taken  by  such 
bank,  a  bond  shall  be  given,  as  required  by  section  nine  hun- 
dred forty-three  of  the  Code  of  Civil  Procedure.  Whenever  the 
superintendent  of  banks  shall  have  paid  to  each  and  every  de- 
positor and  creditor  of  such  bank  whose  claim  or  claims  as  such 
creditor  or  depositor  shall  have  been  duly  proved  and  allowed, 
the  full  amount  of  such  claims,  and  shall  have  made  proper 
provision  for  unclaimed  and  unpaid  deposits  or  dividends,  and 
shall  have  paid  all  the  expenses  of  the  liquidation,  the  superin- 
tendent of  banks  shall  call  a  meeting  of  the  stockholders  of 
such  bank  giving  notice  thereof  for  thirty  days  in  one  or  more 
newspapers  published  in  the  county  where  the  principal  office 
of  such  bank  is  located.  At  such  meeting  the  stockholders  shall 
determine  whether  the  superintendent  of  banks  shall  be  con- 
tinued as  liquidator  and  shall  wind  up  the  affairs  of  such  bank, 
or  whether  an  agent  or  agents  shall  be  elected  for  that  pur- 
pose, and  in  so  determining  the  said  stockholders  shall  vote  by 
ballot,  in  person  or  by  proxy,  each  share  of  stock  entitling  the 
holder  to  one  vote,  and  the  majority  of  the  stock  shall  be  neces- 
sary to  a  determination. 

In  case  it  is  determined  to  continue  the  liquidation  under  the 
superintendent  of  banks,  he  shall  complete  the  liquidation  of 
the  affairs  of  such  bank,  and  after  paying  the  expenses  thereof, 
shall  distribute  the  proceeds  among  the  stockholders  in  propor- 
tion to  the  several  holdings  of  stock  in  such  manner  and  upon 
such  notice  as  may  be  directed  by  the  superior  court.  In  case 
it  is  determined  to  appoint  an  agent  or  agents  to  liquidate,  the 
stockholders  shall  thereupon  select  such  agent  or  agents  by 
ballot,  a  majority  of  the  stock  present  and  voting,  in  person  or 
by  proxy,  being  necessary  to  a  choice.  Such  agent  or  agents 
shall  execute  and  file  with  the  superintendent  of  banks  a  bond 
to  the  people  of  the  state  in  such  amount,  with  such  sureties 
and  in  such  form  as  shall  be  approved  by  the  superintendent 


CALIFORNIA   BANK   ACT  103 

of  banks,  conditioned  for  the  faithful  performance  of  all  the 
duties  of  his  or  their  trust,  and  thereupon  the  superintendent 
of  banks  shall  transfer  and  deliver  to  such  agent  or  agents  all 
the  undivided  and  uncollected  or  other  assets  of  such  bank 
then  remaining  in  his  hands ;  and  upon  such  transfer  and  de- 
livery, the  said  superintendent  of  banks  shall  be  discharged 
from  any  and  all  further  liability  to  such  bank  and  its  credit- 
ors. Such  agent  or  agents  shall  convert  the  assets  coming  into 
his  or  their  possession  into  cash,  and  shall  account  for  and 
make  distribution  of  the  property  of  said  bank  as  is  herein  pro- 
vided in  the  case  of  distribution  by  the  superintendent  of 
banks,  except  that  the  expenses  thereof  shall  be  subject  to  the 
direction  and  control  of  a  court  of  record  of  competent  juris- 
diction. In  case  of  the  death,  removal  or  refusal  to  act  of  any 
such  agent  or  agents,  the  stockholders,  on  the  same  notice,  to 
be  given  by  the  superintendent  of  banks  upon  proof  of  such 
death,  removal  or  refusal  to  act  being  filed  with  him,  and  by 
the  same  vote  hereinbefore  provided,  may  elect  a  successor, 
who  shall  have  the  same  powers  and  be  subject  to  the  same 
liabilities  and  duties  as  the  agent  originally  elected.  Dividends 
and  unclaimed  deposits  remaining  unpaid  in  the  hands  of  the 
superintendent  of  banks  for  six  months  after  the  order  for 
final  distribution  shall  be  by  him  deposited  with  the  state 
treasurer  in  the  same  manner  and  subject  to  the  same  dispo- 
sition as  provided  for  in  section  one  thousand  two  hundred 
thirty-four  of  the  Code  of  Civil  Procedure.  The  superinten- 
dent of  banks  may  pay  over  the  moneys  so  held  by  him  to  the 
persons  respectively  entitled  thereto  upon  being  furnished  sat- 
isfactory evidence  of  their  right  to  the  same.  In  cases  of  doubt 
or  conflicting  claims  he  may  require  an  order  of  the  superior 
court  authorizing  and  directing  the  payment  thereof. 

Sec.  136a.  Any  bank  which  has  ceased  to  do  a  banking  busi- 
ness whether  through  voluntary  action  on  its  part  or  through 
expiration  of  its  corporate  existence,  shall  immediately  liqui- 
date its  affairs  and  any  unclaimed  deposits  or  dividends  shall 
be  paid  into  the  state  treasury  in  the  manner  and  for  the  pur- 
poses provided  in  section  one  hundred  thirty-six  of  this  act 
within  six  months  after  the  date  such  bank  ceased  to  conduct 


104  CALIFORNIA   BANK   ACT 

a  banking  business,  and  in  case  the  superintendent  of  banks 
shall  have  reason  to  conclude  that  the  liquidation  of  such  bank 
is  not  being  safely  or  expeditiously  conducted,  he  may  take  pos- 
session of  the  property  of  such  bank  and  liquidate  its  affairs  in 
the  same  manner  as  provided  in  section  one  hundred  thirty-six 
of  this  act.  Whenever  any  bank  of  whose  property  the  super- 
intendent of  banks  has  taken  possession  as  aforesaid,  deems 
itself  aggrieved  thereby,  it  may  within  the  time  and  in  like 
manner  and  effect  as  provided  in  section  one  hundred  thirty- 
six  of  this  act  apply  to  the  superior  court  to  enjoin  further 
proceedings. 

Sec.  136b.  In  any  action  or  proceeding  brought  under  any 
provision  of  this  act,  exclusive  original  jurisdiction  shall  be 
vested  in  the  superior  court  of  the  county  in  which  is  located 
the  principal  place  of  business  of  the  bank  affected  thereby, 
and  all  proceedings  relating  to  the  same  matter,  under  any 
provision  of  this  act,  including  proceedings  for  liquidation  of 
the  affairs  of  any  such  bank,  shall  be  filed  with  and  treated  as 
a  part  of  the  record  in  such  original  proceedings,  and  all 
papers  relating  to  any  such  action  or  proceeding,  including  the 
copy  of  certificate  of  appointment  of  any  special  deputy  and 
the  inventories  required  to  be  filed  in  the  matter  of  any  such 
liquidation,  shall  be  filed  with  and  made  a  part  of  the  record 
of  such  original  proceeding,  without  the  payment  of  any  addi- 
tional fees  therefor,  and  in  any  such  action  no  damage  may  be 
awarded,  but  the  action  otherwise  shall  be  tried  and  deter- 
mined according  to  the  provisions  of  the  Code  of  Civil  Pro- 
cedure. 

Sec.  137.  1.  Any  bank  shall  have  the  right,  on  application 
of  the  stockholders  or  members  to  apply  to  the  superior  court 
of  the  county  wherein  its  principal  place  of  business  is  situ- 
ated, to  dissolve  said  bank  in  the  manner  provided  for  in  title 
six,  part  three  of  the  Code  of  Civil  Procedure. 

2.  At  the  expiration  of  four  months  after  the  settlement  of 
the  final  account  of  the  receiver  of  any  bank  appointed  prior 
to  July  1,  1909,  any  dividends  due  depositors,  or  other  cred- 
itors, or  stockholders  of  such  bank  and  remaining  unpaid  or 
uncalled  for  and  in  the  hands  of  such  receiver  may  be  paid  by 


CALIFORNIA   BANK   ACT  105 

him  into  the  treasury  of  the  county  in  which  such  bank  is  situ- 
ated which  money  shall  be  held  in  the  treasury  of  said  county, 
and  at  the  same  time  it  shall  be  the  duty  of  such  receiver  to 
furnish  to  the  county  treasurer  of  said  county  a  list  of  names 
of  all  depositors  or  other  persons  to  whom  such  money  belongs 
or  who  are  entitled  thereto  and  thereupon  such  receiver  shall 
be  entitled  to  his  discharge. 

3.  The  moneys  referred  to  in  subdivision  two  of  this  sec- 
tion shall  be  paid  out  on  the  order  of  the  court  appointing 
such  receiver. 

4.  All  moneys  paid  under  subdivision  two  of  this  section, 
uncalled  for  within  five  years  after  being  paid  in,  shall  by 
operation  of  law,  and  without  action  had,  escheat  to  the  state. 
All  moneys  held  by  any  county  treasurer  under  subdivision 
two  of  this  section,  when  such  moneys  have  escheated  to  the 
state  as  hereinbefore  provided,  shall  be  paid  by  the  county 
treasurer  into  the  state  treasury,  and  thereafter  only  be  drawn 
out  in  such  manner  as  may  be  provided  for  by  law  for  the 
estates  of  deceased  persons  escheated  to  this  state. 

5.  The  state  board  of  control  must  invest  such  moneys  in 
the  same  manner  that  the  state  school  land  fund  is  invested  as 
provided  by  law.  But  any  claimant  shall  be  entitled  to  recover 
as  herein  provided  only  the  principal  so  paid  into  the  state 
treasury. 

Sec.  138.  If  any  bank  shall  fail  to  make  any  report  re- 
quired by  the  provisions  of  section  one  hundred  thirty  or  one 
hundred  thirty-a  of  this  act,  within  ten  days  from  the  day 
designated  "for  the  making  thereof  by  the  superintendent  of 
banks,  or  to  include  therein  any  matter  required  by  the  pro- 
visions of  either  of  said  sections,  it  shall  forfeit  to  the  people 
of  the  state  the  sum  of  one  hundred  dollars  for  each  day  that 
any  such  report  shall  be  so  delayed  or  withheld  by  the  failure 
or  neglect  of  such  bank. 

In  the  event  of  the  failure  of  any  such  bank  to  make  any 
such  report  required  from  it,  the  superintendent  of  banks  may, 
in  his  discretion,  immediately  cause  the  books,  papers  and 
affairs  of  such  bank  to  be  examined  at  the  expense  of  such 
bank. 


106  CALIFORNIA   BANK   ACT 

Sec.  139.  It  shall  be  the  duty  of  the  board  of  directors  of 
every  bank  to  examine  fully  into  the  books,  papers  and  affairs 
of  the  bank  of  which  they  are  directors,  and  particularly  into 
the  loans  and  discounts  thereof,  with  a  special  view  to  ascer- 
taining the  value  and  security  thereof,  and  of  the  collateral 
security,  if  any  given,  in  connection  therewith,  and  into  such 
other  matters  as  the  superintendent  of  banks  may  require; 
such  examination  to  be  made  at  least  once  a  year,  but  no  such 
subsequent  yearly  examinations  shall  be  made  within  three 
months  of  the  next  preceding  examination.  Such  directors 
shall  have  power  to  employ  such  assistance  in  making  such 
examinations  as  they  may  deem  necessary.  Within  ten  days 
after  the  completion  of  such  examination,  a  report  in  writing 
thereof,  sworn  to  by  the  directors  making  the  same,  shall  be 
made  by  the  board  of  directors  of  such  bank,  and  placed  on 
file  with  the  records  of  said  bank,  and  shall  be  subject  to  exam- 
ination by  the  superintendent  of  banks. 

Such  report  shall  particularly  contain  a  statement  of  the 
assets  and  liabilities  of  the  bank  examined,  as  shown  by  its 
books,  together  with  any  deductions  from  the  assets,  or  addi- 
tions to  liabilities,  which  such  directors  or  committee,  after 
such  examination,  may  determine  to  make.  It  shall  also  con- 
tain a  statement,  in  detail,  of  loans,  if  any,  which  in  their 
opinion  are  worthless  or  doubtful,  together  with  their  reasons 
for  so  regarding  them;  also  a  statement  of  loans  made  on 
collateral  security,  which  in  their  opinion  are  insufficiently 
secured^  giving  in  each  case  the  amount  of  the  loan,  the  name 
and  market  value  of  the  collateral,  if  it  has  any  market  value, 
and,  if  not,  a  statement  of  that  fact,  and  its  actual  value  as 
nearly  as  possible.  Such  report  shall  also  contain  a  statement 
of  overdrafts,  of  the  names  and  amounts  of  such  as  they  con- 
sider worthless  or  doubtful,  and  a  full  statement  of  such  other 
matters  as  affect  the  solvency  and  soundness  of  the  bank. 

If  the  directors  of  such  bank  shall  fail  to  make  such  exam- 
ination or  fail  to  cause  it  to  be  made,  or  shall  fail  to  file  such 
report  of  such  examination  in  the  manner  and  within  the  time 
specified,  the  superintendent  of  banks  shall  have  authority  to 
make  or  cause  to  be  made  an  extra  examination  of  such  bank, 
at  the  expense  of  such  bank. 


CALIFORNIA   BANK   ACT  107 

Sec.  140.  The  superintendent  of  banks  shall  report  during 
the  month  of  October  of  each  year,  to  the  governor,  for  sub- 
mission to  the  next  ensuing  session  of  the  legislature : 

1.  A  summary  of  the  state  and  condition  of  every  bank 
required  to  report  to  him,  and  from  which  reports  have  been 
received  the  preceding  year,  with  an  abstract  of  the  whole 
amount  of  capital  returned  by  them,  the  whole  amount  of  their 
debts  and  liabilities,  and  the  total  amount  of  means  and 
resources,  specifying  the  amount  of  specie  held  by  them  at  the 
time  of  the  last  report  to  him,  and  such  other  information  in 
relation  to  such  banks  as,  in  his  judgment,  may  be  useful. 

2.  A  statement  of  all  banks  authorized  by  him  to  do  busi- 
ness during  the  previous  year,  with  their  names  and  locations 
and  dates  of  incorporation,  and  particularly  designating  such 
as  have  commenced  business  during  the  year. 

3.  A  statement  of  the  banks  whose  business  has  been  closed 
during  the  year. 

4.  Any  amendments  to  the  banking  law,  which,  in  his 
judgment,  may  be  desirable. 

5.  The  names  and  compensation  of  all  persons  employed 
by  him,  and  the  whole  amount  of  the  receipts  and  expenses  of 
the  department  during  the  year. 

6.  The  names  of  banks  placed  in  his  hands  in  process  of 
liquidation,  and  the  amount  of  dividends  paid  thereon. 

Such  report,  and  the  usual  number  of  copies  for  the  use  of 
the  legislature,  shall  be  printed  and  in  readiness  for  distribu- 
tion by  the  state  printer,  and  one  thousand  copies  shall  be 
printed  for  the  use  of  the  department,  the  expense  of  which 
shall  be  charged  among  the  general  expenses  of  the  depart- 
ment. 

Sec.  141.  1.  The  superintendent  of  banks  shall  keep  in  his 
office,  in  a  place  accessible  to  the  general  public,  a  bulletin 
board  upon  which  he  shall  cause  to  be  posted  at  noon  on 
Friday  of  each  week  a  detailed  statement,  signed  by  him  or,  in 
case  of  his  absence  from  San  Francisco  or  inability  to  act,  by 
the  deputy  superintendent  in  charge,  giving  the  following 
items  of  general  information  with  regard  to  the  work  of  the 
department  since  the  preceding  statement: 


108  CALIFORNIA   BANK   ACT 

(a)  The  name  of  every  bank  that  has  filed  in  the  banking 
department  an'  application  for  authorization  to  commence 
business,  its  location  and  the  date  of  filing  of  such  application. 

(b)  The  name  and  location  of  every  bank  authorized  by  the 
superintendent  of  banks  to  commence  business,  its  capital, 
surplus,  and  the  date  of  authorization. 

(c)  The  name  of  every  bank  to  which  a  certificate  of 
authorization  has  been  refused  by  the  superintendent  of  banks, 
and  the  date  of  notice  of  refusal. 

(d)  The  name  and  residence  of  every  person  appointed  by 
the  superintendent  of  banks  as  a  deputy,  examiner  or  employee 
in  the  banking  department,  the  title  of  the  office  to  which 
appointed,  the  compensation  paid,  and  the  date  of  appoint- 
ment. 

(e)  The  date  on  which  a  call  for  a  report  by  banks  was 
issued  by  the  superintendent  of  banks,  and  the  day  designated 
as  the  day  with  reference  to  which  such  report  should  be  made. 

(f)  The  name  and  location  of  every  bank  whose  creditors 
or  depositors  have  been  paid  in  full  by  the  superintendent  of 
banks  and  a  meeting  of  whose  stockholders  shall  have  been 
called,  together  with  date  of  notice  of  meeting  and  date  of 
meeting. 

(g)  The  name  and  location  of  every  bank  subject  to  the 
banking  law  whose  affairs  and  business  shall  have  been  finally 
liquidated,  or  in  course  of  liquidation. 

(h)  The  name  and  location  of  every  bank  which  has  applied 
for  approval  of  a  change  of  name,  and  the  name  proposed. 

2.  Every  such  bulletin,  after  having  been  posted  as  afore- 
said for  one  week,  shall  be  placed  on  a  file  for  such  statements, 
to  be  kept  in  the  office  of  the  superintendent  of  banks.  All 
such  statements  shall  be  public  documents,  and  at  all  reason- 
able times  shall  be  open  to  public  inspection  during  usual  bank- 
ing hours. 

Sec.  142.  Every  official  report  made  by  the  superintendent 
and  every  report  duly  verified  of  an  examination  made,  shall 
be  prima  facie  evidence  of  the  facts  therein  stated,  for  all 
purposes  in  any  action  or  proceedings  wherein  such  bank  is  a 
party. 


CALIFORNIA   BANK   ACT  109 

(Sec.  143.    Repealed  1913.) 

Sec.  144.  Whenever  by  the  terms  of  this  act  a  penalty  or 
forfeiture  is  imposed,  the  same  shall  be  recovered  in  an  action 
brought  at  the  request  of  the  superintendent  of  banks  by  the 
attorney  general,  in  the  name  of  the  people  of  the  state,  and 
the  sum  recovered  shall  be  paid  into  the  state  banking  fund 
and  used  in  payment  of  claims  against  the  said  fund.  Any 
fine  or  pecuniary  penalty,  which  may  be  incurred  by  any  bank 
on  account  of  the  violation  of  any  provision  of  this  act,  may 
be  compromised  and  a  less  amount  than  that  prescribed  by  this 
act  accepted  by  the  superintendent  of  banks  at  any  time  prior 
to  the  institution  of  action  to  recover  the  same. 

Sec.  145.  The  powers,  privileges,  duties  and  restrictions 
conferred  and  imposed  upon  any  corporation  or  individual 
existing  and  doing  business  under  the  laws  of  this  state  are 
hereby  abridged,  enlarged  or  modified  as  each  particular  case 
may  require  to  conform  to  the  provisions  of  this  act,  notwith- 
standing anything  to  the  contrary  in  their  respective  articles 
of  incorporation  or  charters.  All  the  provisions  of  this  act 
shall  apply  with  equal  force  and  effect  to  all  corporations 
which  are  now  doing  or  which  may  hereafter  do  a  banking 
business  in  this  state,  except  where  express  exception  or  exemp- 
tion may  be  made  herein,  and  to  such  other  persons,  associa- 
tions, co-partnerships  or  corporations  who  shall,  by  violating 
any  of  its  provisions,  become  subject  to  the  penalties  provided 
herein.  The  legality  of  investments  heretofore  made,  or  title 
to  property  heretofore  acquired  or  conveyed  through  transac- 
tions heretofore  had  by  any  bank  pursuant  to  any  provision 
of  law  in  force  when  such  investments  were  made  or  transac- 
tions had,  shall  not  be  affected  by  the  provisions  of  this  act, 
except  that  any  such  investments  made  prior  to  July  1,  1909, 
when  not  complying  with  the  provisions  hereof,  shall  be 
changed  to  conform  hereto;  but  such  change  shall  be  made 
gradually  and  in  such  manner  as  to  prevent  loss  or  embarrass- 
ment in  the  business  of  such  bank,  or  unnecessary  loss  or  in- 
jury to  the  borrowers  on  such  security ;  provided,  further,  that 
in  any  event,  all  investments  and  securities  and  excess  in  in- 


110  CALIFORNIA   BANK   ACT 

vestments  made  prior  to  July  1,  1909,  which  are  not  in  con- 
formity with  the  provisions  and  spirit  of  this  act  and  which 
have  been  acquired  and  are  now  held  by  any  bank,  must  be 
written  off  as  assets  of  such  bank  prior  to  July  1,  1918 ;  and 
no  bank  holding  any  such  investments  or  securities  acquired 
prior  to  July  1,  1909,  shall,  after  July  1,  1918,  be  permitted  to 
pay  any  dividends  to  its  stockholders  until  it  shall  have  writ- 
ten off  all  such  non-conforming  investments  or  securities ;  and 
provided,  further,  that  the  legality  of  any  investments  hereto- 
fore lawfully  made,  pursuant  to  the  provisions  of  this  act  as 
it  existed  on  and  subsequent  to  July  1,  1909,  shall  not  be 
affected  by  the  provisions  of  this  section. 

Sec.  146.    All  acts,  or  parts  of  acts,  in  conflict  with  this  act 
are  hereby  repealed. 

Sec.  147.  This  act  shall  take  effect  July  first,  1909. 


Statutes  of  1909: 

Chapter     76,  Approved  March  1.     In  effect  July  1,  1909. 

Amended  by  Statutes  of  1911: 

Chapter  11,   Approved  Feb.     6.  In  effect  Feb.     6,  1911. 

Chapter  488,  Approved  Apr.  21.  In  effect  June  20,  1911. 

Chapter  494,  Approved  Apr.  21.  In  effect  June  20,  1911. 

Chapter  495,  Approved  Apr.  21.  In  effect  June  20,   1911. 

Amended  by  Statutes  of  1911   (Special  Session): 

Chapter     2,  Approved  Dec.   18.     In  effect  Feb.   16,   1912. 
Chapter   24,  Approved  Dec.   24.     In  effect  Feb.   22,   1912. 

Amended  by  Statutes  of  1913: 

Chapter  104,  Approved  May     6.     In  effect  Aug.  10,  1913. 
Chapter  192,  Approved  May  31.     In  effect  Aug.  10,   1913. 

Amended  by  Statutes  of  1915: 

Chapter  140,  Approved  April  28.  In  effect  Aug.  7,  1915. 

Chapter  608,  Approved  June      3.  In  effect  Aug.  7,  1915. 

Chapter  611,  Approved  June      3.  In  effect  Aug.  7,  1915. 

Chapter  612,  Approved  June      3.  In  effect  Aug.  7,  1915. 


112  CALIFORNIA   BANK   ACT 


ATTENTION  IS  CALLED  TO  THE  FOLLOWING : 

Section  290a  of  the  Civil  Code  in  reference  to  banking  cor- 
porations and  particularly  to  the  last  paragraph  thereof : 

' '  Sec.  290a.  *  #  *  Before  the  secretary  of  state  shall  issue 
any  certificate  of  incorporation  to  any  corporation  specified 
in  this  section  and  before  he  files  any  amended  articles  of 
incorporation  or  other  certificate  increasing  or  decreasing  the 
capital  stock,  extending  or  shortening  the  corporate  existence 
or  increasing  or  decreasing  the  number  of  directors  of  any 
such  corporation  there  must  be  attached  to  said  certificates  or 
amendments  the  approval  of  the  superintendent  of  banks. ' ' 

Section  1278  of  the  Code  of  Civil  Procedure  providing  for 
the  change  of  name  of  banking  corporations : 

"Sec.  1278.  Such  application  must  be  heard  at  such  time 
as  the  court  may  appoint,  and  objections  may  be  filed  by  any 
person  who  can,  in  such  objections,  show  to  the  court  good 
reason  against  such  change  of  name.  On  the  hearing,  the  court 
may  examine  on  oath  any  of  the  petitioners,  remonstrants,  or 
other  persons,  touching  the  application,  and  may  make  an 
order  changing  the  name,  or  dismissing  the  application,  as  to 
the  court  may  seem  right  and  proper;  provided,  that  if  the 
applicant  for  a  change  of  name  be  a  corporation,  such  appli- 
cant shall  file  in  court  at  the  time  of  hearing  the  application, 
the  certificate  of  the  secretary  of  state  that  the  name  desired  to 
be  used  by  the  applicant,  is  not  the  corporate  name  of  any  cor- 
poration existing  at  said  time,  and  that  said  name  does  not  so 
closely  resemble  the  name  of  any  such  existing  corporation  as 
will  tend  to  deceive;  provided,  further,  that  if  the  applicant 
for  a  change  of  name  be  a  banking  corporation,  such  applicant 
shall  file  in  court  at  the  time  of  hearing  the  application,  the 
certificate  of  the  superintendent  of  banks  that  the  name  desired 
to  be  used  by  the  applicant  does  not  resemble  so  closely  as  to 
be  likely  to  cause  confusion,  the  name  of  any  other  bank  pre- 
viously formed  under  the  laws  of  this  state. ' ' 


Index  to  California  Bank  Act 


Section 

Acceptances,  by  commercial   banks,   how  limited 80 

relation  to  loans  in  commercial  banks 80 

Act,    applicable    to    certain    corporations 1 

applicable   to   violators   of  provisions   of 1-145 

bank,   repeals   all   acts   in   conflict 146 

effective    when    147 

title    of    1 

Action,  against  bank  for  escheated  deposits 15 

against  bank,  reports  are  prima  facie  evidence 142 

against  superintendent    of    banks 134-136 

brought   under   bank   act,   jurisdiction   in 1366 

for  sale  of  real  estate,   when 54 

may   be   maintained   by    superintendent   of   banks    to    dissolve 

bank     135« 

to  recover  penalties  by  attorney-general 144 

Adjustment  of  investments  made  prior  to  this  act 145 

Administrator,    deposits    by    51 

may    deposit   with    trust   company 91-92-93 

trust  company  may  act  as 90 

trust  company,   oath  required 90 

Advertisement,    building    and    loan    associations    not    to    advertise 

as  savings  bank    12 

capital,   must  show  amount  paid  up 14 

for    deposits,    prohibited    when 12 

liabilities  must  show  separate 14 

of  banks,    how    regulated 28 

of  bonds,   limited   when 61 

of  branch    offices,    how    regulated 28 

of   merger    31a 

of  sale    of    bank 31 

of   unauthorized   banking   prohibited , 12a 

of  unauthorized  trust  company  prohibited 12a 

resources  must  show   separate 14 

savings,  shall  not  be  advertised  by  whom 49 

surplus  must  show  separate 14 

undivided  profits  must  show  separate 14 

Affidavit  by  guardian  to  be  accompanied  by  letters  of  guardian- 
ship           16 

must  be  certified  by  secretary  of  state 8 

must  be   filed  before  commencing  business 8 

reports    of    banks ; 130-130a 

reports  of  trust   companies    101 

when  filed  by  surviving  relative  or  guardian 16 

Agent,    liability    for    fraud 38 

of  commercial    bank,    loan    to 83 

of  foreign  bank,  must  take  oath 11 

of  savings  bank,  may   borrow  funds 65 

overdraft   of,    prohibited 39 

purchase  of  assets  of  bank,  by 42 

restriction  on  purchase  of  obligations  of  bank,   by 41 

sale  of  mortgage  to  bank  by 35 

special  deputy  superintendent  of  banks  in  liquidating  bank..    13ft 
superintendent  of  banks  for  service  in  foreign  bank 7 

Agreement  of  consolidation  must  be  filed 31a 

of  consolidation  must  have  approval 31a 

sale  and  purchase    31 

Amendment  of  articles  of  incorporation  must  be  filed 8 

of  articles  of  incorporation  see  Sec.  290a  Civil  Code 

Amortization   of   bonds  by   savings   banks 61 

Annexation,  as  affecting  powers  of  banks  and  branch  offices.  .23-60-82 

Annual  Report,  copies  for  distribution 140 

of  superintendent  of  banks  to  contain  what 140 

Appeal  from   order  of  superintendent  of  banks 134-136 

from   seizure   of   bank  property 134-136 


114  CALIFORNIA   BANK   ACT 

Section 

Applications  to  do  banking  business,   investigation   of 127-128 

Appointment    of  appraisers 61a-99-124 

of  special  deputy  superintendent  of  banks 136 

of  superintendent  of  banks 120 

Apportionment  of  capital  and  surplus  to  court  trust  business....      9,0 

of  capital  and  surplus  to  departments 23-60-90 

of  capital  and  surplus  to  private  trust  business 90 

Appraisal     of    property    mortgaged    to    state    treasurer    by    trust 

company     99 

of   securities 61a-99-124 

Appraisers,   appointment    of 61a-99-124 

Articles  of  Incorporation,  amendments  must  be  filed 8 

as    affected    by    bank    act " 145 

may    provide    for    departmental    banking 22 

must  be  certified  by  secretary  of  state 8 

must  be  filed  with  superintendent  of  banks 8 

not  effective  until   filed 8 

of  trust  company 90 

on   consolidation   of  merger 31a 

violation   of,   by  banks. 134-135a-136 

when   filed   by   bank 128 

Assessment,   failure    of   bank    to   pay 123 

of  banks,  how  calculated 123 

of  banks    for    state    banking    fund 123 

refusal   of   stockholder  to   pay 133 

stockholders    must    be   notified 133 

when    capital    stock    impaired 133 

effect  on  first  lien  on  real  estate 57 

Assets,   commercial    bank   may   pledge    for    "borrowed   money"    to 

what   extent   21a 

how  may  be  reached  in  merger 31a 

invested    in    bonds 36-46 

of  banks,    relation    of    loans    thereto 44 

of  departments  held   for    depositors 27 

of  departments  may  be  transferred,   when 25 

of  departments  to   be  kept   separate 26 

overdrafts  limited  to  ninety  days 21a 

purchased   by   directors,    officers   and   employees 42 

relation  of    to    investments 36-46 

relation   of,  to  loans  by  savings  banks 67 

sale  and  purchase 31 

shall  not  be  mingled  with  trust  funds 32 

shall  not  be  pledged  to  give  preference 21a 

Assignee,    deposits    by 51-91-93 

Assistants    of   state   banking   department 121 

Attorney,  designation  of  superintendent  of  banks  by  foreign  cor- 
porations             7 

may  be   employed   in   liquidating 136 

of   state    banking   department 121 

Attorney-General,  actions  brought  by,  to  recover  penalties 144 

duty   in   action   for   escheated   deposits 15 

Auditor,   superintendent   of  banks   shall  provide 124 

Authorization,  certificate   for  commercial   bank 127-128 

certificate  for  foreign    bank     7 

certificate  for  limited  banking  functions 13 

certificate  for  savings    bank    127-128 

certificate  for  trust    company    127-128 

of    loans    to   directors,    agents    and    employees    in    commercial 

banks    83 

refusal  of  by  superintendent  of  banks 128 

refusal  of  by  superintendent  of  banks  for  branch  office 9 

Bad  Debts,  compounding  of 136 

what  are 21a 

Balance,  sale   of   stock   for   assessment 133 

unclaimed   deposits    15 

Bank  Acceptances,  how  limited 80 

Bank,  annual  report  of  superintendent  of  banks 140 

application   to  do   business 127-128 


INDEX  115 

Section 

articles  of  incorporation  must  be  filed 128 

as  a  borrower 21a 

as  member  of  federal  reserve  bank,  subject  to  state  laws....      56 

assessed  for  state  banking  fund 123 

banking  corporation,   how   organized 3 

bond   investment  limited 36-46 

branch    office    9 

capital  impaired   133 

ceasing  business,  must  take  what  action 136a 

classified  as   to   capital  by  population 23 

commercial,   purposes   of 5 

conducting  business  in  unsound  manner 134-135a 

connection  with,  by  superintendent  of  banks  prohibited 120 

considered    insolvent,    when 20 

definition   of 2 

departmental,   separate   books   to  be   kept 26 

departmental,  shall  make  reports  separately 129 

departmental,  shall  publish  statements  separately 129 

deposit  with,   does   not  create   debt,   when 55 

dissolution  of,  by  process  of  law 135a 

dissolved,    funds    of 137 

distribution  of  funds  of  insolvent 136 

escheat   of  unclaimed   deposits 15 

examination  of,  before  issuance  of  certificate 127 

examination  of,  by   court    136 

examination   of,   by  directors   139 

examination  of,  once  a  year 124 

examination  of,  when   failing   to   report 138 

examiner,  failure  to   report   insolvent   condition 126 

examiner,  must    file    oath 125 

examiner,  shall  not  act  as  receiver,  when 125 

expiration   of  corporate  existence 136a 

extra  examination,   expense  of 124 

failure  to  make    report,    penalty 138 

failure  to  pay   assessment    123 

federal  reserve,  exempt  from  examination 48 

fines,   may   be   compromised  before  action   instituted 144 

foreign,   inspection    of     124 

foreign,  see  Corporations,  foreign 

forfeitures,  how  recovered   144 

forfeitures,  may  be  compromised  before  action  instituted....    144 

funds,    when   deposited   with   other   banks 43-68-85 

impairment    of    capital 133-136 

in    liquidation,    names    posted 141 

insolvent   condition   of,   failure   to   report 126 

inspection  of,  by  superintendent  of  banks 124 

in  unsafe  condition 136 

investment   in    bonds   limited 36-46 

investments,   changed  to  conform  to  act 145 

investments   in   own   stock   prohibited 34 

license  to   foreign   corporation 7 

limited  time  to  repair   capital    133 

limited  time  to  report    138 

limited  to  investment  in   safe  deposit 30 

liquidation  of,  by  superintendent  of  banks 136 

loans   on   own   stock   prohibited 34 

may  apply  to  court  to  dissolve 137 

may  be  cited  to  show  cause 134 

may  conduct    safe   deposit   department 30 

may  consolidate,   how 31a 

may  go  into  voluntary  liquidation 136a-137 

may  join  national  reserve  association 56 

may  purchase   real   estate,   when 61-84 

may  resume    business,    when 136 

must  have  certificate  of  superintendent  of  banks 24 

must   liquidate,   when 136a 

must  report  loans  made  to  directors 83 

mutual,  may  have  capital  stock 29 

name,  change  of,  see  Sec.  1278  Code  of  Civil  Procedure 

names  of,  not  to  be  similar 127 

national,    examination    of 48- 

new,    information    of,    to    be    posted 141 

obligations    of,    when    purchased    by    officers,    directors    and 

employees    41 


116  CALIFORNIA   BANK   ACT 

Section 
organization  of,  previous  consent  of  superintendent  required.  .    127 

penalties  imposed,    how    recovered 144 

penalties  pecuniary,    may   be    compromised   before   action    in- 
stituted         144 

publication  of  report   of    132 

publication  of  unclaimed    deposits    15 

purchase    of    31 

refusal   to  observe  order  of  superintendent  of  banks 136 

refusal  to  submit  books 135a-136 

report  of,  to  superintendent  of  banks 130 

rights  of  creditors  in  merger 31a 

sale   of    31 

savings,   purposes  of 4. 

shall   not  own    stock    of    corporations 37 

shall  not  transact  business  without   certificate 127 

signs  must  show  business  conducted 28 

stationery   must   show   business   conducted 28 

stock,  as    collateral,    limited 44 

stock,  minimum  par  value,   except 53 

suspending   payment   of    obligations 135a 

trust   company,    purposes    of 6 

use  of  term   restricted 12 

violation  of  articles  of  incorporation 134-135a-136 

when  unsafe  to  continue  business 135a 

Bank  Act,  annual  report  of  superintendent  of  banks,  as  to 140 

applicable  to  all  violators  of  provisions  of 1-145 

effective  when    147 

in  relation  to  prior  investments 145 

jurisdiction  in  actions  brought  under 136b 

repeals  all  acts  in   conflict 146 

short  title  of 1 

what   applicable    to 1-145 

Banking;  business,  conducted  in  unsafe  manner. 134-135a 

certificate   to   be   posted 50 

defined    2 

departmental     22 

regulation  of 7-9-12-12a-13-90 

unlawful  unless  duly  authorized 2 

when  advertised  must  have  certificate 12a 

state    banks    may   join 56 

Banking-  Corporations,  see  Corporations,   Banking 

Banking  Department,  see  State  Banking  Department 

Bank  Premises,  departments  to  be  in  same  or  adjoining  buildings.  26 

investment  in,   by  commercial  banks    84 

investment  in,   by  savings    banks    61 

investment  in,   by  trust    company    105 

trust  company  may  mortgage  to  state  treasurer,  when 97 

Bills  of  Exchange,  commercial  bank  may  accept 80 

commercial  banks  may  buy  or  discount 80 

not  construed  to  create  debt,  when 55 

relation  to  loans  in  commercial  bank 80 

Bond  of  deputy  superintendent  of  banks 121 

of  special  deputy  superintendent  of  banks 136 

of   superintendent   of   banks 120 

Bonds,  advertisement   of,   limited,   when 61 

available  for  deposit  by  trust  company 96 

commercial  banks  limited  in  investing  in 36-46 

certified,  official  list  to  be  kept 61a 

cost  of  investigation  of 61a 

for   deposits  by  court  order,  not  required 94 

guaranteed     by     mortgage     insurance     as     investments, 

when    61-105-106 

guaranteed  by  mortgage  insurance,  available  for  deposit  by 

trust    companies,    when 96-99 

legal  as  investment  for  savings  banks 61 

must  be  certified,   when 61-61a 

penalty  for  illegal  advertisements  of 61 

power  of  superintendent  of  banks  to  investigate 61a 

savings  banks  limited  in  investing  in 67 

savings  banks  may   loan    on    67 


INDEX  117 

Section 

Books,   audit   of,   by   request 124 

examination   of,   by  directors 139 

inspection   of,   by   superintendent   of   banks 38 

of  departments  to  be  kept  separate , 26 

refusal   of   bank   to   submit 135a-136 

Borrowed  Money,  by  savings  banks  must  be  approved 62 

commercial  banks  may  pledge  assets  for,  to  what  extent 21a 

limit  on  amount  borrowed 21a 

superintendent  of  banks  may  extend  limit 21a 

Borrower,  endorser  and  guarantor,  deemed  to  be 66 

Branch  Office,  certificate  necessary  to  open 9 

effect  of  consolidation   of  cities  on 23-60-82 

regulations  governing  advertising  and  stationery 28 

shall  not  be  permitted  to   open,   when 23 

Building:  and  L.oan  Association,  advertising,  how  restricted 12-12a 

Bulletin,   information   to   general   public 141 

to  be  filed   as   public   document 141 

to  be  posted  by  superintendent  of  banks 141 

Business,  authorization  to  commence 9-13-127 

ceased   by   trust   company 102 

closing   of    137 

examination   of    124 

merger  of 31a 

reports  of 130-130a 

sale   of    31 

winding  up  affairs  of 136 

By-laws,  amendments  must  be  filed 8 

must  be  filed  with  superintendent  of  banks 8 

not  effective  until  filed 8 

of  savings  banks,  must  prescribe  what 64 

Call  for  reports  from  banks,  how  often 131 

Called  Report,  failure  of  bank  to  make,  penalty 138 

from   bank,   how  often 131 

of  bank,   publication   of 132 

time  limited  for  bank  to  make 138 

to  contain  what 130-130a 

Capital,  advertising  of,  must  show  what 14 

apportioned  to  departments 23-60-90 

assigned  by   foreign   corporation 7 

impairment  of    133-136 

increase   or  decrease  of 23 

increase  or  decrease  of,  see  Sec.  290a  Civil  Code 

invested    in    bank    premises,    furniture    and    fixtures    and 

safe    deposit    vaults 61-84-105 

may  be   increased  by  surplus 21 

must  be  paid  up  before  issuance  of  certificate 127 

necessary  to  open   branch  office 9 

of  commercial   bank,    relation   to   deposits 19 

of  foreign  corporation  to  be  separate 7 

of  savings  bank,   in    what    invested 61 

of  savings  bank,   relation    to    deposits 19 

of  trust  company,   how    invested    105 

of  trust  company,   in    what    invested 105 

paid  up  and  surplus  must  equal  what - 19 

reapportionment   to   departments 23 

relation  of  surplus  to 21 

restriction   as    to    loans 80 

Capital  Stock,  as  collateral,  limited 44 

assessed  when    133 

banks   shall   not  invest  in   their  own 34 

banks  shall   not  loan    on    their   own 34 

commercial   bank,   amount   required 82 

directors   of  domestic  must   hold 10 

may  be  sold  for  assessment 133 

mutual   banks  may   issue,   how 29 

of  title  insurance  company  doing  trust  business 106 

reduction    of     55 

required  according    to    classification 23-60-82 

required  by   trust   company 90 

requirements   pertaining   to 53 

savings    bank,    amount    required 60 


118  CALIFORNIA   BANK   ACT 

Section 

Certificate,  for  limited  form  of  banking 13 

mortgage  participation,  legality  of  for  savings  banks 61 

mortgage  participation,  when  available  for  deposit  by  trust 

company     96-99 

necessary  before    transaction    of    business 24 

necessary  for  new  department 24 

of  deposit,  not  construed  to   create   debt,   when 55 

of  deposit,  savings  bank  may  issue 63 

of  special  deputy  superintendent  of  banks  to  be  filed 136 

of  superintendent  of  banks,  filing 128 

of  superintendent  of  banks  in  merger 31a 

of  superintendent  of  banks,  shall  be  issued,  when 128 

of  superintendent  of  banks  to  be  posted 50 

of  superintendent  of  banks  to  be  withheld,  when 7-9-13-127 

of  superintendent  of  banks,  to  state  what 127 

of  trust   company,    when   revoked 98 

requisite    fee    24 

revoked,  when  trust  business  ceases 102 

to  open  branch  office 9 

Certificate  of  Deposit,  bank  can  not  make  partial  payments  on.  .  .    21a 

Certification  of  bonds  by  superintendent  of  banks 61-61a 

of  superintendent  of  banks,  not  to  obligate  the  state 61 

Certified  Checks,  issuance  unlawful,  when 52 

must  be  immediately  charged 52 

Change  of  investments  to  conform  to  act 145 

Checks,  certified,  must  be  charged 52 

certified,  when  unlawful 52 

Chief  Deputy,  failure  to  report  insolvent  condition  of  bank 126 

Citation,  issued  by  superintendent  of  banks 134 

City,  assessment  by,  effect  on  first  lien 57 

bonds  of,  available  for  deposit  by  trust  company 96 

legality  of  bonds  of 61 

Claims  against  bank   in   liquidation 136 

objection   to,    liquidation 136 

Classification,  as  applied  to  banks  previously  organized 23-60 

of  banks    .  . . . 2 

of  cities,  governed  by  federal  census 23-60 

of  cities  in  relation  to  capital  and  surplus 23-60-82 

of  trusts    .  . 101 

Cluh,  loans  to,  exemptions  in  favor  of 65-83 

Collateral,  commercial  bank  may  pledge  assets  to  what  extent...    21a 

directors  to  receive  report  on 139 

Collateral  Trust,  bonds,  when  legal  for  savings  banks 61-61a 

Collections    of   deposits   by   survivors 16 

Commercial  Bank,  advertising,  how  regulated 28 

bond  investment  limited 36-46 

capital  and  surplus,  their  relation  to  deposits 19 

capital    required    82 

classified  as  to  capital  by  population 23 

definition  of   5 

deposit  with   another  commercial   bank,   regulated 85 

how    organized    to    conduct 3 

investment   in   bank   premises 84 

loans  of,    limited    80-81 

loans  to  corporations    80-83 

loans  to  directors  and  employees 83 

loan   to   officers  prohibited 83 

may  accept  drafts  or  bills  of  exchange,  when 80 

may  borrow  money  to  what  extent 21a 

may  pledge  assets  to  what  extent 21a 

must  be  duly  authorized 2 

overdrafts  limited  to  ninety  days  as  assets 21a 

overdue  interest,  how  limited 21a 

purposes    of 5 

real  estate  loans  restricted 47 

reserve  required 20 

Commercial  Paper,  commercial  banks  may  buy  or  discount 80 

loans   on,   by   commercial   banks,   how   governed 80 

savings  bank  may  discount  or  purchase,   when 67 


INDEX  119 

Section 
superintendent  of  banks  may  authorize  purchase  or  discount 

of,   by  savings  banks 67 

Commission  to  officers,  directors  and  employees  prohibited 39 

Common  Carrier,  may  be  licensed  for  limited  banking 13 

Condition,  must  be  published 132 

Consolidation,  approval   of   stockholders 31a 

approval  of  superintendent  of  banks  required 31a 

articles  of  incorporation  and  consolidation 31a 

how  assets  of  merged  banks  may  be  reached 31a 

liability  of  banks  in 31a 

of  banks 31a 

of  cities,  effect  on  branch  offices 23-60-82 

rights  of  creditors  in 31a 

Construction,  all  preceding  or  conflicting  acts  repealed 146 

create    debt    55 

Contract,  real  estate,  not  to  be  sold  to  bank,  when 35 

with  officers,    directors    or    employees 42 

with  savings   depositor    64 

Corporate  Existence,  obligations  of  bank  after  expiration 136a 

Corporations,  club,  exemptions  in  favor  of  loaning 65-83 

consolidated    31a 

doing  title  insurance  and  trust  business 107 

for  banking,   how  organized 3 

loans    of,    when    officers,     directors    or    employees    of    bank 

interested 65-83 

may  deal  in  exchange  or  letters  of  credit,  when , 13 

membership,  exemptions  in  favor  of  loaning 65-83 

mortgage  insurance,   securities  of,  as  deposit  by  trust  com- 
pany  96-99 

mutual,  may  issue  capital  stock 29 

powers  and  privileges   must  conform   to  act 145 

religious,    exemptions    in    favor    of    loaning ....65-83 

sale  and  purchase .  . . 31 

shall  not  use  word  "savings,"  when 12-12a-12c-49 

shall  not  use  word  "trust,"  when 12-12a-126-12c-102 

stock  of,  as    collateral,    limited 44-67 

stock  of,  banks    shall    not .  own 37 

Corporations,  Banking,  may  do  departmental  business,  when 22 

must  file   certain   papers 8 

organization  of   127 

Corporations,  Foreign,  as  fiscal  agents 90 

can   not  exercise  powers   of   trust  company 7 

loans  based  on  total  capitalization,  when 7 

may  act  as  executor,  when 7 

may  lend  certain  moneys  not  assigned  to  this  state 7 

may  lend  money  in  this  state 12c 

must  execute  power  of  attorney  to  superintendent  of  banks..        7 

powers   as   co-trustee 90 

service  of  papers 7 

service  of  process    7 

shall  not  act  as  trustee 90 

shall  report  to  state  banking  department 130 

subject  to  state  laws 7 

Costs,  in  liquidation . 136 

in  sale  of  certain  real  estate 155 

Counsel,  compensation,  liquidating  delinquent  banks 136 

County,  assessment  by,  effect  on  first  lien 57 

bonds  of,  available  for  deposit  by  trust  company 96 

legality  of  bonds  of 61 

County   Clerk,   certificate   of   superintendent   of   banks  to   be   filed 

with 128 

certificate  of  merger  to  be  filed  with 31a 

County  Deposits  in  savings  banks 62 

Court  may  authorize  deposit  with  trust  company 91 

may  order  deposit  with  trust  company 93 

may  require  knowledge  of  private  trusts 103 

Court  Trust,  definition  of 101 

to   be   separately   secured 96 

when  deemed  to  include  private  trust 101 


120  CALIFORNIA   BANK   ACT 

Section 

Create  Debt,  meaning  of,   restricted. 55 

Creditors,  rights  of,  against  banks  sold 31 

rights  of,  against  merged  bank 31a 

rights  of,   in    liquidation    136 

Currency  Association,  state  banks  may  join 56 

Debt,  savings  banks  shall  not  contract,  except 62 

Deceased  Depositors,  amount  due  to,  must  be  reported 15 

when  moneys  due  to,  escheat 15 

Deeds  of  Trust,  legal  for  deposit  by  trust  companies 96 

Definition  of  bank 2 

of  commercial  bank    5 

of  "electrical  corporation"    61 

of  "gas    corporation"    61 

of  "net    earnings"    61 

of  "pipe    line   corporation" 61 

of  "public   utility"    61 

of   "railroad   corporation"    61 

of  "reserve  depositary"    ,. 20 

of  "reserves  on  deposit"    20 

of  "reserves  on   hand"    20 

of  savings  bank    4 

of   "street    railroad    corporation" 61 

of   "telegraph  corporation"   61 

of  "telephone  corporation"   61 

of  "total    reserves"    20 

of  trust    company 6 

of   "water   corporation"    61 

Departmental  Bank,  application  for  permission  to  conduct 23 

apportionment   of  capital  and   surplus 23-60-90 

assets  to  be  held  for  depositors,  how 27 

assets  to  be  kept  separate 26 

books  of  account  to  be  kept  separate 26 

classified   as    to   capital    by   population 23 

conducted    by    trust    company 106 

corporation  may  transact  business  of 22 

departments   to  be  in   same   or  adjoining  building 26 

deposits,    conditions    of    repayment 27 

investments,  how  held 27 

may    transfer   assets,    when 25 

new    department   must   have    certificate 24 

re-apportionment  of  capital  and  surplus 23 

relation    of    departments 26 

shall  make   separate   reports   of  departments 129 

shall  publish   statements  of  departments  separately 129 

statement  of  segregation   of  capital  and  surplus 23 

total    reserves    required 25 

Departmental  Business,  by   title   insurance   companies 107 

Deposit,    by    administrator 51 

by  assignee     51 

by  executor    51 

by  guardian    51 

by  order    of    court 51 

by  receiver    51 

by  trust    department    with    commercial    department    of    same 

corporation     25 

by   trust    department   with    savings   department    of    same    cor- 
poration      25 

by  trustees    51 

certificate  of,  savings  bank  may  issue 63 

in  federal   reserve   bank,   by  state   bank 48 

in  national  bank,   by  state  bank ;  48 

of  postal  savings   in   savings  banks 62 

of    trust    companies    with    state    treasurer    to    be    increased, 

when    98 

of  trust  companies  with  state  treasurer  to  consist  of  what..  96 
trust   companies   may   mortgage   premises    to   state   treasurer, 

when    97 

Depositary,  approval  by  superintendent  of  banks,  when 43 

federal   reserve   bank,   for   state   bank 48 

national   bank  acting  as 48 

reserve,   how   nominated   and   designated 20 


INDEX  121 

Section 

Depositor,  contract  with,  in  savings  bank 64 

deceased     15 

repayment  to,   by  savings  banks 64 

.  saving's,  may  be  paid  by  draft 62 

unknown    15 

Deposits,  additional  to  be  made  by  trust  company,  when 98 

advertising-   for,    prohibited   when 12 

by  trust  department  with  other  departments  of  same  bank.  ...  25 

collected    by   survivors,    when 16 

escheat  of    15 

joint     16 

must  not  be   increased,   when 19 

not  construed  to  create  debt,   when 55 

of  a   commercial   bank   with  another  commercial   bank,   regu- 
lated      85 

of  banks 43 

of  deceased  persons,  how  collected 16 

of  foreign   corporation   to   be   separate 7 

of  married  women   16 

of  minors     16 

of  other  banks  with  savings  banks 68 

of  savings  banks  with   other  banks 68 

of  trust  company,  may  be  withdrawn  from  state  treasury....  98 

of  trust  company,   securities  may  be  exchanged 96 

of  trust  company   securities,    documents   and   appraisal 99 

of  trust  funds 16 

reserve   required   for 20-68-105 

savings,    advertised    49 

savings  bank,   in  what  invested 61-67 

savings  bank,   repayment   of    64 

state,  county,  municipal  and  postal,  in  savings  banks 62 

trust  company,  in  what  invested 105-106 

unclaimed    15 

unclaimed,  when  bank  suspends  business 136a 

when   exempt   from   attachment    or   sale.  . ..., 16 

when  preferred    51-62 

with   other  banks  by  departments 25 

with   trust  company,  authorized   by   court 91 

with   trust  company,  by    administrator    91-92-93 

with  trust  company,  by   court   order 93 

Deputy  of  superintendent  of  banks,   qualifications   of 121 

of  superintendent  of  banks,  salary 121 

of  superintendent  of  banks,  shall  execute  bond,  when 121 

Designation    of    depositary 43 

of   reserve  depositary,   how  made 20 

Directors,   eligibility  of 10 

examination   of   bank   by 139 

increase  or  decrease  of,  see  Sec.  290a  Civil  Code 

in  merger 31a 

liability    for    fraud 38 

list  of,  to  be  posted 17 

may  authorize  loans  to  directors,  agents  or  employees 83 

may  be  removed,    when 10 

may  declare   dividend,    when 21 

may  employ    assistance    in    examinations 139 

may   sell  no  bond  or  contract  to  bank,  when 35 

may  sell  stock    for    assessment 133 

must   hold   monthlv   meetings 11 

oath    of  * 11 

of  commercial  bank,  loans  to 83 

of  savings  bank,   in  relation   to  corporation   loans 65 

of  savings   bank,   loans    to    prohibited 65 

of  savings  bank,   shall    not    be    endorsers 65 

overdraft    of,    prohibited 39 

purchase  of  assets  of  bank,  by 42 

qualifications    of    10-11 

restriction  on  purchase  of  obligations  of  bank,  by 41 

shall  levy  assessment,   when 133 

shall  not   receive   commission 39 

Discount,   banks   of 5 

on   bills  of  exchange,  amount  of 80 

on   commercial   or   business   paper,   amount   of 67-80 

relation  to  loans  in  commercial  banks ,.-.  80 


122  CALIFORNIA   BANK   ACT 

Section 

Dissolution,  banks  shall  have  right  to  make  application  for 137 

causes    for     136 

proceedings    in     136-137 

Dividends,  accrued   but   unpaid   interest   not   calculated 45 

by    banks    holding-    illegal    securities 145 

directors  may  declare,   under   what  conditions 21 

escheat  to  state,  when 137 

from  banks   in   liquidation 136 

in    receiver's   hands,    how   disposed   of 137 

of  savings   banks,    how   restricted 64 

of  suspended  banks   136a 

paid  out  on  court  order 137 

trust   company  may   receive,    on   securities   deposited 96 

when   escheated  to   state,   invested  how 137 

Draft,  savings  depositors  may  be  paid  by 62 

commercial  bank  may  accept 80 

Earnings,    disposition    of 21 

Electrical  Corporation,  definition   of 61 

Eligibility    of   directors 10 

Employees,  liability   for  fraud 38 

may  sell  no  bond  or  contract  to  bank,  when 35 

of  commercial    bank,    loans    to 83 

of  savings  bank,   may   borrow   funds 65 

of  state  banking  department 121 

overdraft   of,    prohibited 39 

purchase   of  assets  of  bank,   by 42 

restrictions  on  purchase  of  obligations  of  bank,  by 41 

shall  not  receive  commission 39 

Endorser,    deemed    to    be   borrower,    when 66 

Entries,  penalty  for  false 38 

Escheat  of  deposits,  duty  of  attorney-general  in  action 15 

of  deposits,  duty  of  county  clerk,  in  action 15 

Escrow-Holder,    not   subject   to    supervision    of    superintendent    of 

banks  acting  as  trustee,  when 101 

Examination,  at  expense  of  bank,  when 138 

causes   for   dissolution 134-136 

federal  reserve  bank  exempted 48 

of  banks,  before  issuance  of  certificate , 127 

of  banks  by  directors 139 

of   banks,    special 124 

of  banks,   upon  failure  to  report 138 

of  national   banks 48 

of  organization  documents  by  superintendent  of  banks 8-127 

of  securities  for  deposit  by  trust  companies 96-97-98-99 

special,  per  diem  charged 124 

Examiner,  failure  to  report  insolvency 126 

may  administer  oath 124 

must  take  constitutional   oath 125 

oath  of,   must  be   filed,   where 125 

of   state   banking   department 121 

shall  not  be  appointed   receiver,   when 125 

Exchange,  dealers  in,  must  have  license 13 

Execution,   deposits    of   married   women    or   minors   exempt   from, 

except    16 

Executor,  deposits  by 51-91-93 

foreign   corporation  may  act  when 7 

trust  company  may  act  as 6-90 

trust  company,  oath  required 90 

Existence,  corporate,  obligations  after  expiration  of 136a 

Expense  of  state  banking  department 122-123-124 

Express  Company  may  deal  in  exchange  or  letters  of  credit,  when.      13 

Federal  Reserve  Hank,  exempted  from  examination 48 

state  banks  may  join 56 

state  members  subject  to  state  laws 56 

Federal  Reserve  Hoard,  regulations  of,  on  commercial  paper 67 

Fee  for  appraisal  of  trust  company  securities 99 

for  branch  office 9 


INDEX  123 

Section 

for  certificate  to  do  banking-  business 9-13-24 

for    examination    of    documents   accompanying-   trust    company 

securities 99 

for  filing  proceedings  in  liquidation 136ft 

for  investigating   bonds 61a 

for  serving  process  on  foreign  corporations 7 

for   special  examination 124 

Filing  of  certificate  of  superintendent  of  banks 128 

of  directors'  examinations 139 

of  documents  preliminary  to  organization 8-127 

of  list  of  unclaimed  deposits 15 

of  proceedings  in  liquidation 136ft 

Fine,  bank,  may  be  compromised  before  action  instituted 144 

First  Lien  on  real  estate,  effect  of  certain  assessments 57 

Fiscal  Agent,  foreign  corporation  as 90 

Foreign   Banks,   inspection   of 124 

Foreign  Corporations,  see  Corporations,  Foreign 

Forfeiture,   causes  for  dissolution 134-136 

of  bank,  pecuniary,  how  may  be  compromised 144 

of  bank,  recovered  how 144 

unauthorized   banking  prohibited 12-12a-49 

unlawfully  opening  branch  office 9 

Funds,  of  commercial  bank  with  another  commercial  bank,  regu- 
lated           85 

of  receiver,  escheat  to  state,  when 137 

of   state   banking   department 123 

paid  into  county  treasury  by  receiver,  when 137 

paid  out  on  court  order 137 

when  escheated  to  state,  invested  how 137 

Furniture  and  Fixtures  for  offices  of  state  banking  department..    122 

investment  in,   by  commercial   banks 84 

investment  in,   by  savings  banks 61 

investment  in,  by  trust  companies 105 

Gas  Corporation,  definition  of 61 

Government  bonds  available  for  deposit  by  trust  company 96 

legality  of  bonds  of 61 

Governmental  Lien,  not  prior  incumbrance,  when 57 

Governor,  annual  report  of  superintendent  of  banks  to  be  made  to   140 

superintendent  of  banks  appointed  by 120 

Gratuities  to  officers  prohibited 39 

Guaranteed  Policy  of  mortgage  insurance,  legality  of,  for  savings 

banks 61 

Guarantor  deemed  to  be  borrower 66 

Guardian,   affidavit   of,   must    be   accompanied   by   letters   of   guar- 
dianship          16 

deposits  by 51-91-93 

may  collect  deposit,   when 16 

must  file  affidavit  with  bank,   when 16 

trust  company  may  be,  for  estate 90 

trust  company,   oath   required 90 

Hypothecation    of   assets 21a 

Impairment   of  capital   stock 133-136 

Incorporation,    see    Articles    of    Incorporation 

Information  accessible  to  general  public 141 

bulletin  posted  in  office  of  superintendent  of  banks 141 

for   public    17 

on  file  for  stockholders. 17 

Injunction  against  superintendent  of  banks 134-136 

restraining  use  of  words  or  terms 12 

Insolvent   bank,   duties   of  superintendent  of   banks , 136 

bank,   failure   to   report 126 

upon  failure  to  restore  reserve 20 

Inspection  of  all  banks  once  a  year 124 

special   when   necessary 124 

Interest  accrued  but  unpaid,  not  profits,  when 45 

on  deposits  of  trust  funds 95 


124  CALIFORNIA   BANK   ACT 

Section 

overdue  one  year,  debt  considered  bad 21a 

trust  company  may  receive,  on  securities  deposited 96 

Inventory,  liquidation  of  delinquent  banks 136 

Investigation  of  bonds  and  securities  by  superintendents  of  banks   61a 

of  bonds  and  securities,  cost  of 61a 

of  fitness  of  stockholders 128 

Investment  Certificates,  building  and  loan  associations  may  issue     12a 

Investments,  bank  shall  not  invest  in  own  stock 34 

by  savings  banks  after  July  1,  1909,  legality  of 66 

changed  to  conform  to  act,  how 145 

illegal,  to  be  written  off 145 

in  bonds  by  commercial  bank  limited 36-46 

in  stock  of  corporations  prohibited,  except 37 

of  departments  held  for  depositors 27 

of  each  department  must  be  separate 26 

of  trust  funds,  how  regulated 105 

trust  company,  how  governed 106 

Irrigation  District,  assessment  by,   effect  on   first  lien 57 

bonds  of,  available  for  deposit  by  trust  company 96 

bonds   of,   legality   of 36-46-61-96 

Joint  Deposits,  savings  bank  deposit  in  name  of  two  or  more  per- 
sons        16 

Judgment  dissolving  bank,  superintendent  of  banks  may  procure.  .135a 

Jurisdiction  in  actions  brought  under  bank  act 136& 

Law,  banking,   effective  when 147 

governing  banks  joining  national   reserve  association 56 

Legality  of  bonds  or  notes  for  savings  banks 61 

of  investments  prior  to  this  act 145 

Letters  of  Administration,  certain  heirs  need  not  procure,  when..      16 

Letters  of  Credit,  dealers  in  must  have  license 13 

relation  to  loans  in  commercial   bank 80 

Liabilities,  advertising  to  be  separate 14 

shall  not  be  increased,  when 20 

total  of  one  borrower  how  computed 80 

Liability  for  making  false  statement 38 

of  directors,  officers  or  employees  for  fraud 38 

of  stockholders,  can  not  be  waived 40 

License,  forfeiture  of 7-13-98-134-136 

to  banks 127 

to  begin  business,  fee  for 24 

to  buy  or  sell  exchange  or  issue  letters  of  credit 13 

to  foreign  corporations 7 

to  open  branch  offices 9 

to   trust   companies •. 127 

when  may  be  refused  or  withheld 7-9-13-127 

Lien,  governmental  not  prior,  when 57 

Life  Insurance  Companies,  use  of  word  "trust"  by  foreign 12& 

Limit,  "borrowed  money"  amount  of 21a 

of  amount  of  real  estate  loans 47-57-67-105 

of  deposit  liabilities 19 

of  deposit  of  banks  in  a  savings  bank 68 

of  deposit  of  commercial  bank  with  another  commercial  bank, 

regulated 85 

of  deposit  of  savings  bank  in  any  one  bank 68 

of  investment  in  commercial  paper  by  savings  bank 67 

of  investment  in  safe  deposit  department 30 

of  loans  by  commercial  banks 46-47-80 

of  loans  by  savings  banks 66-67 

of  loans  by  trust  companies 105 

of  loans  on  bank  or  corporation  stock 44-67 

of  purchase  of  bonds  by  commercial  bank 36-46 

of  time  for  holding  real  estate 54 

on  deferred  payment  of  interest 21a 

superintendent  of  banks  may  extend,  on  money  borrowed....    21a 

Liquidation,  banks  in,   claims  against 136 

banks  in,  names  to  be  posted 141 

compensation   of  counsel   in 136 

costs  in 136 


INDEX  125 

Section 

filing  of  proceedings   in 1366 

of  banks  by  superintendent  of  banks 136 

of  banks,  voluntary 136a- 13.7 

proceeding's,  notice  to  banks 136 

voluntary,  superintendent  of  banks  may  take  possession 136a 

when  corporate  existence  expires 136a 

Loans,  bank  shall  not  loan  on  own  stock 34 

by  commercial  banks,  how  limited 47-80-81 

by  commercial  banks,  to  directors,  agents  and  employees 83 

by  commercial  banks,  to  officers  prohibited 83 

by  foreign  corporations 7 

by  savings  banks,  how  limited 57-66-67 

by  savings  banks,  prohibited,  when 68 

by  savings  banks,  renewal  of 66 

by  savings  banks,  to  directors  or  officers  prohibited 65 

on  corporation  or  bank  stock,  limited 44-67 

on  first  lien  on  real  estate,  effect  of  certain  assessments 57 

real   estate 47-57 

savings  bank,  effect  of  public  utilities  act 61 

shall  not  be  increased,  when , 20 

to  clubs,  religious  or  membership  corporations,  application  of 

law 83 

to  corporations,  directors  or  officers  interested 65-83 

to  directors,  agents  or  employees 65-83 

trust   company,    how   governed 105-106 

when  savings  banks  must  not  make  new 64 

Location,  powers  as  affected  by  consolidation  of  cities 23-60-82 

powers  of  banks  dependent  upon 23-60-82 

powers  of  trust  companies  dependent  upon 23-90 

Losses  may  be  charged  to  surplus,  when 21 

reserve  fund  may  be  charged  with 64 

shall  be  written  off  when 21a 

Manager,  of  foreign  bank  must  take  oath 11 

Market  Value  of  oil,  mineral  or  timber  land,  how  determined 61 

Married   Women,   deposits   of 16 

Meeting  of  directors  once  a  month 11 

of  members  of  mutual  bank  to  capitalize 29 

of  stockholders,  superintendent  of  banks  may  call 135 

Members  of  bank  may  make  application  to  dissolve 137 

of  mutual  bank  may  elect  to  capitalize 29 

Membership  Corporations,  loans  to,  exemptions  in  favor  of 65-83 

Merger,  see  Consolidation 

Mining  Stock,  loans  on,  by  savings  banks,  prohibited 67 

Mineral  Land,  fixing  market  value  of 61 

Minor,  deposits  of ► 16 

trust  company  guardian   of   estate   only 90 

Mortgage,  deposited  by  trust  company  with  state  treasurer 97 

of  trust  company  deposited,  title  and  appraisement 99 

restriction  as  to  loans  on 47-57-67 

sale  to  banks  by  officers,  etc.,  permitted  when 35 

Mortgage  Insurance,  guaranteed  policy  of,  legality  of,  for  savings 

banks 61 

policy    to    accompany    participation    certificates    deposited    by 

trust  company    99 

Mortgage  Participation  Certificates  available  for  deposit  by  trust 

company,    when    96-99 

legality  of  for  savings  banks 61 

Municipal  assessment,   effect  of,   on   first  lien 57 

Municipal  Deposits  in  savings  banks 62 

Mutual  Bank,  how  reserve  fund  shall  be  increased 64 

may  have  capital  stock,  when 29 

payment  of  losses  out  of  reserve  fund,  when 64 

relation  of  reserve  fund  to  deposits 64 

Name,  change  of,  see  Sec.  1278  Code  of  Civil  Procedure 

restrictions   on 12-12a-12&-12c-49-127 

National  Bank,  examination  of  as  depositary 48 

National  Reserve  Association,  state  banks  may  join 56 


126  CALIFORNIA   BANK   ACT 

Section 

Net  Earnings,  definition  of 61 

Notes,  guaranteed  by  mortgage  insurance  as  investments,  when.. 

61-105-106 

guaranteed   by   mortgage   insurance,   available   for   deposit   by 

trust  companies   96-99 

legal  for  savings  banks,  when 61 

Notice  of  assessment  on  stock 133 

of  liquidation  to  all  banks 136 

required  by  savings  banks  from  depositors 64 

Oath  of  bank  examiner 125 

of  directors 11 

of  managers  or  agents  of  foreign  bank 11 

of  office,  of  superintendent  of  banks 120 

refusal  of  officers  to  be  sworn,  penalty  for 135a-136 

who  may  administer 124 

Officer,  liability  for  fraud 38 

may  sell  note,  bond  or  contract  to  bank,  when 35 

of  bank,  loans  to  prohibited 65-83-105 

of  commercial  bank  in  relation  to  corporation  loans.         ...  83 

of  commercial  bank  shall  not  be  endorser 83 

of  savings  bank,  in  relation  to  corporation  loans 65 

of  savings  bank,  shall  not  be  endorser 65 

of  trust  company  entitled  to  knowledge  of  private  trusts.  .,.  .  .  103 

overdraft  by,  prohibited 39 

purchase  of  assets  of  bank,  by 42 

refusal  to  be  examined  on  oath 135a-136 

restriction  on  purchase  of  obligations  of  bank,  by 41 

shall  not  receive  commission 39 

Offices  of  state  banking  department 122 

Official  Reports  of  superintendent  of  banks,  prima  facie  evidence.    142 

Oil  Land,  fixing  market  value  of 61 

Order,  refusal  of  bank  to  observe 136 

to  show  cause,  issued  by  superintendent  of  banks 134 

Organization  of  bank,  examination  of  documents 8-127 

of  bank,  previous  consent  of  superintendent  required 127 

of  banking  corporation,  papers  to  be  filed 8 

of  trust  companies 90 

Overdraft,  limited  to  ninety  days  as  asset 21a 

prohibited  to  officers,  employees,  etc 39 

Participation  Certificates,  mortgage,  legality  of,  for  savings  banks     61 

mortgage,  when  available  for  deposit  by  trust  company 96-99 

Par  Value  of  capital  stock,  minimum,  except 53 

Payment  of  expenses  of  banking  department 123-124 

suspended  by  bank,  cause  for  dissolution 135a-136 

Payment  of  Deposits  by  savings  banks,   notice  required,  when....      64 

of  two  name 16 

to  married  women 16 

to  minor 16 

Penalties  for  encroachment  on  reserves 20 

for  illegal  advertisement  of  bonds 61 

pecuniary,  may  be  compromised  before  action  instituted 144 

recoverable  how 144 

to  be  paid  into  state  banking  fund 144 

violators  of  bank  act  subject  to 1-145 

Per  Diem  charged  for  special  examinations 124 

Personal  Property,  savings  banks  may  loan  on 67 

Petition  of  stockholders  for  dissolution 137 

Pipe  Line  Corporation,  definition  of 61 

Place  of  Business,  see  Location 

Pledged,  stock  of  directors  of  domestic  bank  must  not  be 11 

Policy,  Guaranteed  of  mortgage  insurance,  legality  of  for  savings 

banks 61 

Political  Lien,  not  prior  incumbrance,  when 57 

Population  governing  ratio  of  reserve  required 20 

in  relation  to  capital,  governed  by  federal  census 23 

see  Location 


INDEX  127 

Section 

Postal  Savings  deposited  in  savings  banks 62 

deposits  of,  shall  not  be  construed  as  "borrowed  money" 21a 

Powers,  building1  and  loan  associations,  restrictions  on 12-12a 

of  banks 2-4-5-6 

of  commercial  banks 5 

of  saving's  bank 4 

of  trust  companies 6 

Preferred  Claims,  deposits  by  order  of  court  are 51 

deposits  of  banks  in  liquidation  by  superintendent  of  banks.    136 

deposits  of  postal  savings  are 62 

deposits  of  public  moneys  are 62 

Preferred  Creditors,  banks  shall  not  pledge  assets,  except 21a 

Preferred  Stock  unlawful  for  banks,  except 53 

President,  loans  to  prohibited 65-83-105 

publication  of  unclaimed  deposits 15 

verification   of   reports 130-130« 

Principal   Office    26 

Prior  Incumbrance,  political   or  governmental  not  such,   when....      57 

Private  Trust,  definition   of 101 

not  subject  to  inspection  of  superintendent  of  banks,   except.    101 

officers  entitled  to  knowledge  of 103 

shall  be  deemed  to  be  court  trust,  when 101 

subject  to  supervision,   when 101 

to  be  separately  secured 96 

trustee  shall  not  disclose,  what 103 

Proceedings  against  bank,  reports  are  prima  facie  evidence 142 

in   dissolution   136-137 

in  liquidation,   filing   of 136?> 

to   enjoin   superintendent  of   banks 134-1  36 

when  banks  are  merged 31a 

when  bank   sells  assets 31 

when  capital  of  bank  is  impaired 133 

when  reserve  falls  below  required  amount 20 

Process,  service  on   foreign   corporations 7 

Profit  and  Loss,  certain  debts  charged  off  to,  when 21a 

Profits  accrued  but  uncollected,   interest  not  to  be  included  in...      45 

Public,    information    for 17-141 

Public  Administrator,  deposits  of,  with   trust  company 92 

may  deposit  with  any  bank,  when 51 

may  deposit  with  savings  bank,   when 68  % 

Publication,  deceased  depositors,  list  of 15 

of  false  statement,  penalty  for 38 

of  notice  by  county  clerk  in  escheat  proceedings 15 

of  notice  of  agreement  of  sale  and  purchase 31 

of  notice  of  assessment  of  stock 133 

of  notice   of  liquidation 136 

of  notice  of  mutual  bank  to  capitalize 29 

of  notice  of  sale,  affidavit  to  be  filed 31 

of  report  to  superintendent  of  banks 132 

of  sale  of  real  estate  by  court 54 

unknown   depositors,    list   of 15 

Public    Deposits,    reserve    against,    not    required    in     commercial 

banks    20 

Public  Moneys  deposited  in   savings  banks 62 

deposit  of,  shall  not  be  construed  as  "borrowed  money" 21a 

Public  Utilities  Act,   effect   on   loans   and   investments   by   savings 

banks 61 

Public  Utility,  bonds  of,  when  legal  for  savings  banks 61-61a 

definition   of 61 

Purchase  of  assets  of  banks  by  officers,  directors,  etc 42 

of  banks 31 

of  departments  of  banks 31 

of  obligations  of  bank  by  directors,  etc 41 

Purposes  of  commercial  banks 5 

of  savings  banks 4 

of  title  insurance  and  trust  company  restricted 22 

of   trust   company 6 


128  CALIFORNIA   BANK   ACT 

Section 

Railroad,  bonds  of,  when  legal  for  savings  banks 61-61a 

Railroad  Corporation,  definition  of 61 

Ratio  of  capital  and  surplus  to  deposit  liabilities 19 

of  reserve  to  deposit  liabilities 20-68-105-106 

Real  Estate  consisting  of  oil,  mineral  or  timber  land,  how  valued.      61 

contract  not  to  be  sold  to  bank,  when 35 

held  longer  than  five  years,  proceedings  for  sale  of 54 

loans  on,  by  commercial  bank 47 

loans   on,   by   savings   bank 67 

loans    on,   by   trust   company 105-106 

loans  on,  effect  of  governmental  liens 57 

mortgaged  as  deposit  by  trust  company 96 

when  second  mortgages   on,   permitted 47-67-80 

Reapportionment  of  capital  and  surplus  to  departments 23 

Receiver  appointed  prior  to  July  1,   1909 137 

bank   examiner  shall   not  act,  when 125 

deposits   by   51 

funds  of,   escheat  to  state,  when 137 

funds   of,   held  in  county  treasury,  when 137 

trust  company,  oath  required 90 

Reclamation  District,  assessment  by,  effects  on  first  lien 5  7 

Release,  savings  bank,  payment  to  one  of  two  or  more  persons.  .  .      16 

Religious  Corporation,  loans  to,   exemptions  in  favor  of 65-83 

Report,  annual,  of  superintendent  of  banks  to  governor 140 

failure  of  bank  to  make,  penalty 138 

loans  to  agents  or  employees  of  savings  bank 65 

loans  to  directors  and  employees  of  commercial  bank 83 

of  banks,  called  for,  how  often 131 

of  banks,  publication  of 132 

of  banks,   shall  contain  what 130 

of  bank,  time  to  make,  limited 138 

of  banks  to  state  banking  department 130 

of  examination   by  directors 139 

official,  of  superintendent  of  banks,  prima  facie  evidence 142 

of  loans  to  co-partnerships  in  which  directors,  agents  or  em- 
ployees  are   interested 83 

of   loans   to   corporations   in   which   officers,    directors    or   em- 
ployees   are    interested 65-83 

of    unclaimed    deposits 15 

special,  to  superintendent   of  banks 130a 

trust  company  must  report,  what 98-101 

weekly  bulletin  by  superintendent  of  banks 141 

Reserve   for   departmental    bank 20-25-68-106 

how  shall   be  restored 20 

not  to  be  carried  against  public  deposits  in  commercial  banks     20 

of  commercial  banks,  relation  to  deposits 20 

of  departments  to  be  kept  separate 25 

of  savings  banks 68 

of  savings  banks,   relation  to  deposits 19 

penalty  for  encroachment  on,  in  commercial  banks 20 

percentage  may  be  kept  in  eastern  cities,  when 20 

ratio  required  governed  by  population 20 

required  for   commercial  banks 20 

trust   company,    how   governed 106 

trust  funds  not  to  be  carried  as 32 

Reserve  Depositary,  how  nominated  and  designated 20 

Reserve  Fund,  mutual  savings  banks,  amount  required 60 

of  mutual  savings  bank,  may  be  used  how 64 

Resources,   advertising   to   be    separate 14 

Revolving  Fund,   superintendent  of   banks  may  retain 123 

Rulings  on  commercial  paper  by  superintendent  of  banks 67 

Safe  Deposit  Department,  any  bank  may  conduct 30 

investment  in,  by  commercial  bank 84 

investment   in,    by    savings    bank 61 

investment   in   by    trust  company 105 

Safety  deposits,   in  insolvent  bank 136 

Salary  of  employees   of  state  banking  department 121 

of    superintendent    of   banks 120 


INDEX  129 

Section 

Sale  of  banks   or  departments 31 

Savings  of  school  children 9 

shall  not  be  advertised  by  whom 12-12a-49 

Savings  Bank  advertising-,   how  regulated 28 

bonds   and  notes  when  legal  for   investment 61 

borrowed   money,    approval   of 62 

by-laws  must  prescribe  what 64 

capital  and  surplus,  their  relation  to  deposits 19 

capital    stock    required 60 

classified  as  to  capital  by  population 23 

contract    with    depositors 64 

corporation   loans,   directors  or  officers   interested 65 

county    deposits    in 62 

definition     of 4 

department,    reserve    required 68 

depositors  may  be  paid  by  draft 62 

deposits   of   other    banks,    with 68 

employees   or   agents   may   borrow   funds 65 

how   organized   to   conduct 3 

investment   in   bank   premises 61 

investments,    effect   of  public   utilities   act 61 

investments,    legality    of .61-66 

loans,  effect  of  public  utilities  act 61 

loans  must  be   secured,   how 67 

loans    of,    limited 66 

loans   to   directors  and   officers  prohibited 65 

may  borrow  postal  savings 62 

may  borrow  public  money 62 

may   issue    certificates   of   deposit 63 

may  purchase  or  discount  commercial  paper,  when 67 

municipal    deposits    in 62 

must    be    conducted,    how 69 

must  be   duly    organized 2 

must  not  make  new  loans  when 64 

mutual,  reserve  fund  of,  must  be  increased  when 64 

mutual,    reserve   fund,    when    required 60 

only,  to  receive  savings  deposits 49 

organized   without   capital   stock 60 

purposes     of 4 

real  property  may  be  purchased  or  held 61 

reserve     required 68 

securities   hypothecated,   approval   of 62 

shall   not   contract   debt,    except 62 

use    of    term    restricted 12-12a-49 

without  capital  stock  reserve  fund  must  equal  what 19 

Savings   Department   investments   to  be   separate 26 

Savings  Deposits  advertising  for,  prohibited  when 12-12a 

School  District  assessment  by,  effect  on  first  lien 57 

bonds  of,  available  for  deposit  by  trust  company 96 

legality    of    bonds    of 61 

School    Savings   how    deposited 9 

regulations    concerning 9 

Seal   of   superintendent   of  banks 134 

Second  Mortgage  when  bank  may  loan   on 47-67 

Secretary  of  State  see  section  290a  of  Civil  Code 

shall    certify   documents    when 8 

Securities  additional  deposit  of,  by  trust  company 98 

certified,    official   list   to   be   kept 61a 

cost  of  investigation  of 61a 

deposited  by  trust  company,  examination  of 96-97-98-99 

exchange   of,   by  trust   companies 96 

hypothecated  by  savings  bank 62 

illegally    held    by   banks 145 

power  of  superintendent  of  banks  to  investigate 61a 

withdrawal   of,   by  trust  companies 98 

Security  percentage,   for  savings  bank  loans 67 

Service   of.  papers   on   foreign   corporations 7 

Signs  of  banks  must  show  what 28 

Special    deputy    superintendent    of    banks 136 


130  CALIFORNIA   BANK   ACT 


Section 

Special  Report  of  banks,  superintendent  of  banks  may  require 130a 

State  assessment  by,  effect  on  first  lien 57 

law  of,  violated  by  banks 134-135a-136 

legality  of  bonds  of 61 

shall    be   responsible    for    securities    deposited    by    trust    com- 
pany          96 

State  Banking;  Department,  assistants 121 

attorney     121 

banks  must  report  to .'  130 

bulletin  to  be  filed  as  public  document 141 

chief  deputy,  failure  to  report  insolvent  condition 126 

chief  deputy,    qualifications    of 121 

created     120 

examiner,   failure   to   report  insolvent  condition 126 

examiner  of,  must    file    oath 125 

examiner  of,  shall  not  act  as  receiver  when 125 

examiners     ,  121 

fund     of 123 

information  to  be  posted  in  office 141 

officials  of,  cannot  borrow  from  state  banks 121 

provision    for    offices 122 

special    report   to 130a 

State  Banking:  Fund,  amount  of 123 

banks   shall   be  assessed  for 123 

method   of  assessing  banks 123 

salaries   paid   out   of 123 

State  Deposits  in   savings  banks 62 

Statement  of  all  banks,  to  be  submitted  to  governor 140 

State  of  California,  bonds  of,  available  for  deposit  by  trust  com- 
pany      96 

State  Treasurer  deposit  with,  by  trust  company 90 

may  accept  mortgage  on   trust  company  premises,   when 97 

to   receive   deposits   of  trust  company   securities 96 

Stationery   of   banks,   must  show  what 28 

Statute  of  Limitations  on  sale  of  bank  or  department 31 

Stock  as   collateral,   limited 44-67 

impairment     of 133-136 

investment  in,   prohibited 37 

number  of  shares  held  by  directors  to  be  posted 17 

par  value,    minimum,    except 53 

preferred,    prohibited,    except 53 

subscription  lists   of  bank   subject  to  previous  consent   of  su- 
perintendent  of  banks 127 

Stockholders  controlling,  may  sell  note,  bond  or  contract  to  bank 

when     35 

fitness    of,    investigation    of 128 

information    for     17 

liability   of,   cannot   be   waived 40 

liability  of,  in   sale 31 

may  elect  receiver,   when 136 

may  make   application   to   dissolve 137 

meeting  of,   may  be  called  by  superintendent  of  banks 135 

must  be   notified  of  assessment 133 

must   confirm   consolidation 31c 

names   of,   to  be  on   file 17 

refusal    to    pay    assessment 133 

Stockholders  Meeting,  superintendent  of  banks  may  call 135 

Street   Railroad  Corporation,   definition   of 61 

Subscription    Lists,    for    organization     stock    of      bank,     must    be 

approved    127 

Summons,  service  on  foreign  corporation 7 

Superintendent  of  Banks,  action  by,   to  procure  judgment  of  dis- 
solution   135a 

annual    report   to   governor 140 

appointment     of ,.  . .  .  120 

approval  of  capital    and    surplus    apportioned '. . . .  23 

approval  of  depositary,    when 43 

approval  to  open    branch    office 9 

approval  to  transact    banking    business 127 


INDEX  131 

Section 

authority    to    liquidate    bank 136 

bond     required 120 

bulletin  to  be  posted  in  office  of ., 141 

certificate  of    9-13-127-128 

certificate   of,    to   be  posted 50 

consent  necessary  to  do  departmental   business 23 

consent  of,  necessary  to  organize  banking  corporations 127 

copy  of  corporate  papers  to  be  filed  with 8 

foreign  corporations  subject  to  supervision 7 

holds  office  at  pleasure  of  governor 120 

issuance  of  order  to  show  cause,  when 134 

liquidation     by. 136 

may  appoint   special   deputies 136 

may  authorize  acceptance  of  drafts  and  bills  of  exchange  by 

commercial    banks    80 

may  authorize  additional    deposits   by   trust   company 98 

may  authorize  deposits   by   trust   company 96 

may  authorize  exchange  of  trust  company  securities 96 

may  authorize  the  purchase  or  discount  of  commercial  paper 

by    savings    banks 67 

may  authorize  withdrawal  of  trust  company  deposits,  when..      98 

may  call  meeting  of  stockholders 135 

may  compromise  pecuniary  penalties  or  forfeitures  imposed.  .    144 

may  enforce  '  stockholders    liability 136 

may  examine  national  banks,  when 48 

may  limit  deposits  by  commercial  banks  with  other  commer- 
cial   banks 85 

may  make    extra    examinations 124 

may  require   special    report 130a 

may  retain    revolving    fund 123 

may  take  possession  of  unsound  bank 136 

must  designate  reserve  depositary 20 

oath   of  office 120 

official  reports  prima  facie   evidence 142 

official    seal    of 134 

powers    of 124 

power  to  examine  foreign   corporations 124 

power  to   investigate  bonds  and   securities 61a 

previous  consent  to  circulate  stock  lists  for  bank 127 

reports   of   banks   to 130 

report  to,  by  banks  how  often 131 

report  to  by  banks  to  be  published 132 

rulings   on   commercial   paper 67 

salary    120 

shall  be   appointed  attorney   of  foreign   corporations,   when..        7 

shall  direct   discontinuance    of   unsound   practices 134 

shall  employ  chief  deputy,  attorney,  examiners  and  other  as- 
sistants         121 

shall  file  copy  of  license  with  county  clerk 128 

shall   give    notice    of   liquidation    proceedings 136 

shall  not   be   connected   with   banks 120 

shall  not  inspect  private  trusts,   except 101 

shall  provide   auditor,    when 124 

shall  require  banks   to   repair   capital,   when 133 

trust   company   must    report,    what 98 

Superior  Court,  as  to   conflicting  claims,   liquidation   of  banks....    136 

winding   up   affairs    of   bank 136 

Surplus,  advertising   of  shall   be   separate 14 

apportioned    to    departments 23-60-90 

maximum   necessary   to  maintain 21 

may    be    converted    into   capital 21" 

of  savings  bank,  in  what  invested 61 

of  trust  company,   in  what  invested 105 

one-tenth  of  net  profits  to  be  added  before  dividend 21 

re-apportionment    to    departments 23 

when  may  be  used  to  pay  losses 21 

Surviving  Relatives,  may   collect   deposit,   when 16 

Survivor,  joint  deposit,  to  be  paid  to. ... . 16 

Taxes,  effect  on  first  lien  on  real  estate 57 

Telegraph   Company,   may   deal    in    exchange   or   letters    of   credit, 

when      13 

Telegraph   Corporation,   definition   of 61 


132  CALIFORNIA   BANK   ACT 

Section 

Telephone    Corporation,    definition    of 61 

Timber   Land,   fixing  market  value 61 

Title    of   act , 1 

to  accompany  mortgage  deposited  by  trust  company 99 

Title  Insurance  Company,  doing  trust  business 106-107 

shall  not  conduct  commercial  or  savings  bank 22 

trust  department,  application    of    law 107 

trust  department,  assessment  for  state  banking  department..  107 
trust  department,  must  report  to  superintendent  of  banks...  107 
trust  department,   subject    to    supervision 107 

Total  Reserves,  definition   of 20 

trust  funds  not  to  be  carried  as  any  part  of 32 

Town,  assessment  by,  effect  on  first  lien 57 

Transfer  of  assets  and  liabilities  by  bank 31 

Trust   department,  affairs  shall  be  separate 90 

Trust  Company,  additional  deposits  by,  to  be  authorized 98 

additional  deposit   with    state   treasurer,   when 98 

additional  powers   dependent  upon   location 90 

additional  powers   of   certain   companies 106-107 

additional  report   required    101 

advertising,   how   regulated 28 

affidavit  to   be  made  before  commencing  business 90 

appointment  as  trustee,  bond  not  required  except 94 

articles    of    incorporation 90 

capital   required    90 

causes    for    dissolution 134-136 

certain    documents    to    accompany    mortgage    deposited    with 

state     99 

court   trusts    96-101 

definition    of    6 

departmental    business     106 

deposits  by,  to  be  authorized 96 

deposits  with,  authorized    by    court 91 

deposits  with,  by  court  order 93 

deposits  with,  how  secured    98 

deposits  with  state   treasurer    96-97-98-99 

exchange  of  securities  deposited  by,  to  be  authorized 96 

how   organized  to  conduct 3 

interest  or  dividends  on  securities  deposited 96 

investment    of    trust    funds 94 

knowledge   of   private   trusts   confidential 103 

liquidation   of    136 

may  act  as  executor 6-90 

may  mortgage   premises   to   state   treasurer,    when 97 

may  resign   as  trustee   under  private   trust  when 101 

may  withdraw  securities  from   state  treasurer,   when 98 

must  be  duly  organized 2 

must  not  be  foreign  corporation,  except 7 

notification  of  increase  in  trusts  to  be  made 98 

oath  as  executor  required 90 

powers    of t 6 

private    trusts    96-101 

private  trusts,  confidential,   except 101-103 

private  trust  shall  be  deemed  to  be  court  trust,  when 101 

provisions  for  ceasing   business 102 

purposes   of    6 

qualifications    90 

reserve  of   106 

restriction     on     investments 105-106 

revocation  of  certificate  shall  not  affect  trusts 98 

securities  deposited   may  be   exchanged 96 

shall  pay   interest  on   deposits 95 

trust  funds,   meaning   of   term 98 

trusts   classified    101 

use   of   term   restricted 12-12a-126 

Trust   Department,    may   deposit   with   commercial    department    of 

same  corporation  when 25 

may  deposit  with  savings  department  of  same  corporation..  25 
operated  by  title  insurance  company 106-107 


INDEX  133 

Section 
Trustee,    deposits    by 51 

foreign   corporations,   prohibited   to  act  as,    except 90 

when   acting  as  escrow-holder 101 

Trust    Funds,    deposits    of 16-25 

interest  on,'  as  provided  by  court 95 

investments,    how    regulated 105 

meaning   of   term 98 

shall  not  be  counted  as  reserve 32 

shall  not  be  mingled 32 

Trusts,    how    classified 101 

Unclaimed  Deposits,  escheat   of 15 

publication   of 15 

report    of     15 

Undivided    Profits,     one-tenth     to     be     carried     to     surplus     before 

dividend    21 

shall  not  be  combined  with  surplus  in  advertising 14 

United  States,  assessment  by,  effect  on   first  lien 57 

bonds  available  for  deposit  by  trust  company 96 

legality    of    bonds    of 61 

Unknown    Depositors    15 

Unsafe  Practices,  penalty  for 134-136 

Vacancy  in  office  of  superintendent  of  banks,  how  filled 121 

Violation  of  act,  penalty  for,  may  be  compromised 144 

of  any  law  of  state 134-135a-136 

of  bank  act  by  others  than  banking  corporations 1-145 

Voluntary  Liquidation  of  banks 136a-137 

Warning  to  discontinue  violation  of  law 134 

Water  Corporation,   definition   of 61 

Withdrawal  of  savings  deposits,   conditions   of 64 

of  securities  by  trust  company 96-102 


